Remainder Interest following a Life Estate

A life estate involves deeding real property to a charity and retaining the right to continue living in the property. This allows the donor to take a charitable income tax deduction for the present value of the remainder interest and to avoid potential capital gains tax on the property's appreciation. Upon the death of the donor, the property is owned by the charity and can be sold and the proceeds used to support those organizations or purposes the donor has indicated.

SUMMARY FOR LIFE ESTATE:

Document that creates:   Deed

Revocable?                     No

Ultimate beneficiary?       To benefit charities of choice

Lifetime beneficiary?        Donor

Annual benefit:                Retained life estate

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