Real Estate Subject to Life Estates

Life Estate Gift

A life estate gift is also called a gift of a remainder interest in a residence, vacation home, or farm to a charity while the donor is living, and the donor retains the right to use the property for life. The donor receives a current income tax deduction for the gift that can be used to reduce one’s current taxable income.  [Example]

Highlights

• Retain the use of your residence or vacation home.
• Receive an income tax deduction.
• Reduce the size of your estate.
• Provide a legacy of support to charities through the Northwest Christian Community Foundation.

For more information about life estate agreements involving your residence or vacation home, contact us at office@nccf4christ.org or phone at 503-892-6264.  Financial and tax deduction calculations, customized gift plan proposals and counsel are available at no charge or obligation.

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Example – life estate

Jack and Esther have lived in the same home for 30 years.  They are happy and fully intend to remain in the home for the rest of their lives.  At age 77, they are enjoying their retirement years.  They have no children and intend for their home, now valued at $350,000, ultimately to be used to benefit Northwest Christian Community Foundation.

Jack and Esther decided to deed their home to Northwest Christian Community Foundation now and retain a life estate.  This gives them the right to live in their home and use the property as long as they live.

They receive an immediate income tax deduction for a portion of the home’s value.  At age 77, that deduction is $200,069.

Ages 77, 77
FMV of home                $350,000
Income tax deduction     $200,069

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