Charitable Life Estate
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Gift of a Remainder Interest in a Farm or Personal Residence
A gift of a remainder interest in a farm or personal residence (also known as a charitable retained life estate or charitable retained life tenancy) entails a transfer of title to a personal residence, vacation home, farm, or other qualified real property to the university, subject to the right of the donor to occupy and otherwise enjoy the property's benefits for life.
In addition to enjoying the benefits of the property, including any income that may be earned by the property currently or in the future, the donor, known as the life tenant, continues to bear the responsibilities and costs of ownership during his or her life.
A charitable retained life estate is a “split-interest” gift: a life interest for the donor and a remainder interest for the university. At the time of the transfer, the life tenant receives a charitable income tax deduction equal to the value of the university’s remainder interest in the property, as determined using the method prescribed by law. Several factors are used to determine this value, the most influential of which are the fair market value of the property, the value of the land relative to the total value of the property, and the life expectancy of the life tenant.