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Retained Life Estate
A Retained Life Estate is
a gift arrangement whereby you give legal ownership of your residence
or farm to a charity, but retain a life estate - that is
you retain the right to live in or enjoy the gifted property for
the remainder of your or someone else's life. The charity receives
the property without restriction at the death of the holder of the
life estate.
How does it work?
Ann Maxwell, a widowed
Millsaps alumnus has decided to give her home to Millsaps, but reserves
the right to live in the home for as long as she lives. Her attorney
prepares a "Life Estate" agreement deeding the home to
Millsaps which agrees to pay the ongoing property taxes on the home.
Ann pays for her fire insurance as well as any maintenance on the
home. In return for her gift, Ann receives an income tax deduction
based on the present value of her future gift. In
addition, Ann's home will not be tied up in probating her estate
at her death, but will immediately pass to Millsaps without restriction.
What are the benefits?
- Immediate income tax deduction
based on the present value of the future gift.
- Removes the property from the potential
costs and delays of probate.
- Potential estate tax savings since
property is excluded from taxable estate.
DISCLAIMER
The information contained in this site is for educational purposes
only. The reader understands that Millsaps College is not
rendering legal advice and that the reader should seek independent
legal counsel when contemplating estate planning decisions.
For
More Information Contact
Gift and Estate Planning
Services
P.O. Box 151191
Jackson, MS 39210-1191
(voice) 601-974-1035 (fax) 601-974-1088
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