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A donor may have a piece of real property such as a house or farm that he wishes to leave to charity at death, while also hoping to benefit from the tax deduction he would receive by giving the gift in his lifetime.
A Life Estate Reserved allows a donor to make that special gift to charity now but retain the right to use the home or farm for the rest of the donor’s life. A deed is executed transferring a house or farm to charity. The deed states the donor’s right to a “life estate,” or absolute right to live in the home and use it for life. The donor enhances the gift by entering into an agreement specifying his responsibility to provide maintenance, insurance, and tax payments. A gift of this magnitude can give peace of mind to the donor while supporting charitable work that makes a real difference in the life of many.
The Benefits
- An immediate tax deduction for the “remainder value” of the property
- Lifetime use of the family home or farm
- Inclusion of the home in the estate value with an offsetting charitable deduction created at death
- A generous gift of support to The Fellowship
Download or request a free copy of The Fellowship’s Planned Giving Ideas and Options Guide>>
Lee’s Life Estate Reserved Story
Lee Jones, 75, lives in northern California. Her home occupies five beautiful acres of hilltop property overlooking the Pacific. Her husband John, who built the home ten years earlier, has passed away. Prior to his death, Lee and John agreed that they wanted the home to go to The Fellowship* after they both died so that they could make a legacy gift to support Israel and the Jewish people. Lee has an unrestricted deed prepared, which transfers ownership of the home to The Fellowship after her death and also agrees to continue maintaining the property, insurance, and tax payments until her death.
* All gifts of real property must be given to the IFCJ Foundation that manages the sale of the property and then transfers the cash to The Fellowship. Acceptance is contingent on a satisfactory “environmental audit” and other factors.
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