Goal: Give your personal residence or
farm, but retain life use
Benefit: tax advantages plus
use of the property for your lifetime
Diagram
A retained life estate is a gift plan defined by federal tax law allowing the donation of a personal residence (to include a vacation home) or farm with the donor retaining the right to life enjoyment. A life estate may be retained for one or more lives or it may be retained for a term of years. All routine expenses - maintenance fees, property taxes, repairs, etc. - are the responsibility of the donor. The donor receives income tax benefits in the year of the gift (the property is irrevocably deeded to the charity) and estate tax benefits.
For the purposes of taxes, the property within a retained life estate is divided into two parts:
At the time of death of the final owner of the life estate, the property passes into the possession of the charity.
Should the donor decide to sell the property that is subject to a life estate, that can be accomplished in partnership with the charity. At the time of the sale, the remaining value of the life estate is calculated and the proceeds from the sale are dived proportionately between the charity and the donor. The donor may also decide to gift the remaining value of the life estate to the charity and, in so doing, would receive a charitable tax deduction for the value of the life estate at the time of the gift.
A retained life estate allows the donor to maintain his and/or her lifestyle and at the same time makes it possible for the donor to make a significant gift to a charity.
Return to the Legacy Giving home page or to the Quick Guide to Legacy Gifts.
If you are considering a tax-wise planned gift or changes to your will or trust to include a bequest, we would be delighted to answer any questions or help in any way. Call (352) 873-7400 ext 1771 for a confidential discussion to see how Hospice can fit into your estate planning. You may also email the Planned Giving Director, Beth McCall, CFRE.
Please note, individual financial circumstances will vary. The information on this site does not constitute legal or tax advice, either in whole or in part. Donor stories and photographs are for purposes of illustration only. As with all tax and estate planning, please consult your attorney or estate specialist. All material is copyrighted and is for viewing purposes only. Use of this site signifies your agreement with the terms of use. The content in this Legacy Giving section has been developed for Hospice of Marion County by Future Focus.
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A copy of the official registration and financial information may be obtained from the Division of Consumer Services by calling toll-free 1-800-435-7352 within the state or at www.FloridaConsumerHelp.com Registration does not imply endorsement, approval or recommendation by the State.
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