After Lifetime Gifts

Retained Life Estate

For many people a home is their most valuable asset. Through a retained life estate you can give your home to a charity while you (and your spouse or child) continue to live out the rest of your life in your home.

Using this tool you would deed your home to the charity now, and yet retain the right to continue living in your home for the remainder of your life (and your spouse's or child's).

You could make whatever changes you wanted to the house and would continue to have responsibility for maintenance, insurance, property taxes and any remaining mortgage payments.

When you (and your spouse or child) pass away possession of the house would pass on to the charity.

There are substantial income tax savings involved with this estate planning tool, the amount of which is based on your age (and spouse's age) and the value of your home. For example, if you were 65 and your home was worth $400,000, your income tax deduction could be over $100,000. The exact amount of tax savings would be determined by your accountant using IRS tables.

You can create a retained life estate for any type of home, including a vacation home. For example, you could gift a one-half interest in a vacation home. In this scenario you could continue to use the property as a vacation home for one-half of the year, and the charity would use it for the other half. You would receive an income tax deduction for half the value even though you would still have a home for vacations.

With this tool you retain complete control over your property while you are living. If you wish, you can even move out and rent the home to someone else. You would receive all of the rental income. The only limitation is that you cannot sell or transfer title of the property to someone else, since the property will go to the charity after your demise.

Please note: The information on this site is not intended as legal, tax or investment advice. For such advice, please consult a professional advisor of your choice.

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