Preservation easements should play an important role in managing real estate holdings by creating a family legacy, generating substantial tax advantages, and facilitating other real estate investments. Unfortunately, portfolio and family office advisors are often unaware of these opportunities. After first describing the two main easement categories—cultural heritage preservation and natural heritage preservation—and their key characteristics, the authors discuss a few of the basic elements wealth managers need to understand when considering these real estate tools and provide examples of how preservation easements can be put to work to enhance portfolio value, provide opportunities to enhance the tax-efficiency of the portfolio, and achieve philanthropic goals.
Authors: John A. Kilpatrick and Victoria B. Adams
Originally published in the Journal of Wealth Management, Vol. 11, No. 1 (Summer 2008)