Conservation Easement Tax Incentives Expire Soon

The Pension Protection Act of 2006 added temporary tax incentives for the donation of conservation easements. Ordinarily, the income tax charitable deduction allowable for the donation of a conservation easement is limited to 30% of the donor's contribution base (a modified adjusted gross income figure), and the excess value of the donation may be carried forward for only five years. The Pension Protection Act increased the percentage limitation for most taxpayers to 50%, and the carry forward limit to 15 years. However, these new incentives for conservation easement donations apply only to donations of conservation easements made between January 1, 2006 and December 31, 2007.

Because the donation of a conservation easement requires a survey, a specialized appraisal, and negotiation with the donee conservation organization, all of which can take several months, donors need to act now if they hope to take advantage of the tax incentives offered by the Pension Protection Act. Proposed legislation has been introduced to extend the incentives, but that legislation is likely to languish because tax incentives for conservation easements are somewhat controversial. Past abuses in the valuation of conservation easements have caught the attention of the IRS and Congress, which has lead to wrangling over the content of further legislation.

The Portsmouth Shipyard

On October 9, I had the opportunity to present an estate planning seminar at the Portsmouth Naval Shipyard. I have been doing these presentations for many years and have watched as the shipyard has struggled through some hard times. This week, the atmosphere at the shipyard seemed more positive than ever. When I did a seminar a couple of years ago right after the vote to save the yard, there was excitement, but now there seems to be a quiet confidence. People do not seem concerned about losing their jobs, and I expect that is a feeling that they have not had in the past. It was a pleasure to see the energy of this place that plays such an important role in seacoast life.

New Hampshire Health Insurance Coverage for a Former Spouse

New Hampshire's law regarding health insurance coverage for a former spouse will change on January 1, 2008. After January 1, 2008, a former spouse will be able to continue his/her coverage under the employer sponsored group health insurance plan of the participating spouse. This means that a former spouse will receive the same benefits and coverage as he/she did during the marriage under the plan without triggering rights under COBRA. The former spouse can elect to continue coverage until the earliest of the following events occurs:

1. the 3 anniversary of the final decree of divorce or legal separation;
2. the remarriage of the former spouse;
3. the remarriage of the member spouse ;
4. the death of the member spouse; or
5. such earlier time as stated by the final decree of divorce or legal separation.

Upon the occurrence of one of the events above, the former spouse will then be able to elect continued coverage under COBRA, which will likely trigger a higher insurance premium to continue the coverage. The new law does not apply to employer's self-insured plans. As a former spouse, you will want to be prepared for this financial issue when it happens.

A former spouse will have 30 days from the divorce decree to elect continued coverage and this election must be in writing. Depending upon the health insurance plan, the former spouse may be responsible for the payment of a premium if coverage is elected. Also, the new law allows the health insurance provider to charge an administrative fee up to 2 % of the monthly premium cost. The divorce decree should state which party will pay these potential costs to avoid having to return to Court after the divorce to address this issue.

If you are in the midst of a divorce, you should seek legal counsel regarding your specific rights and responsbilities under New Hamphisire's new law for health insurance coverage.

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Welcome to the Wiggin & Nourie, PA blog. The purpose of this blog is to share changes in New Hampshire law, supply artices of interest and keep our readers up to date with happenings throughout New Hampshire and all over New England. Please come back often.