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Gifts of Real Estate

Life Estates

For most people, their home represents a significant portion of their personal net worth. In addition to providing the security of a physical and emotional base, a home can appreciate greatly in value. As a non-productive asset it is usually difficult to extract any economic benefit from one’s home other than by actually selling it. However, there are here is a charitable gift strategy that may be helpful.

Retained Life Estate

You may donate your residence and still retain uninterrupted use and occupancy for the remainder of your (and your survivor’s) lifetime. The property is conveyed by deed to your favorite charity subject to the life estate. By donating this future interest in your home to the charity of your choice, you will generate a current charitable income tax deduction and exclude the property’s value from your estate for estate tax purposes. This can be done not only with a primary residence but also with a vacation home. With a vacation home, you need not use a life-estate agreement if you do not use the home for the entire year. If, for example, you spend three months of every year there and it remains unoccupied for the balance of the year, a ¾ interest (i.e., those nine months) can be transferred to generate an immediate income tax deduction equivalent to ¾ of the fair market value of the property. You would still be able to enjoy the property for your customary three months each year.

For more information, contact Esther A. Slack, Development Coordinator at 973-478-7662 or at eslack@bgcgarfield.org.