What is life estate reserved?
Donors sign a Life Estate Agreement and a deed, transferring immediate ownership of the real estate to Thrivent Charitable Impact & Investing®; however, the deed states the donor retains the right to use the property for their lifetime(s). At the end of the donor’s life, Thrivent Charitable takes immediate possession of the property, and it does not go through probate. The property is sold and the net proceeds are allocated to the donors’ choice of charitable funds at Thrivent Charitable.
Gift Minimum: $200,000
How to make a gift of real estate with life estate reserved
1. Request a personalized illustration . To create a customized illustration for your client, Thrivent Charitable requires the following information:
3. If your client wishes to proceed and establish a gift of real estate,create a fund at Thrivent Charitable and complete and return and the real estate questionnaire .
4. Review your compensation options from Thrivent or American Funds.
- Client's name, birthdate, and tax bracket.
- Proposed gift amount including cost basis. Please distinguish between the value of land and the value of buildings and other improvements.
3. If your client wishes to proceed and establish a gift of real estate,
4. Review your compensation options from Thrivent or American Funds.
Target audience
- Clients interested in making a gift of real estate, but who want to continue to use or rent out the property during their lifetime.
- Clients who wish to give real estate and bypass associated gains when it is sold.
- Clients who wish to remove the property from their estate now and avoid probate.
Potential tax and financial benefits of life estate reserved
- Your client receives a charitable income tax deduction in the year of the gift equal to a portion of the appraised fair market value.
- For gifts of long-term appreciated real estate, the annual deduction limit is 30% of the donor’s AGI.
- Unused charitable deductions may be carried over an additional 5 years.
- A donor can use or rent the property until their death, at which time Thrivent Charitable takes possession.
- The property given is not subject to probate.
- Thrivent Charitable sells appreciated assets tax-free.
Benefits to you, the financial professional
Thrivent Charitable will support you with a full range of charitable products and services, and you'll be compensated for your efforts by Thrivent or American Funds.
More about gifts of life estate reserved
After Thrivent Charitable takes possession of the property, it is sold and the net proceeds are allocated to the donor’s charitable fund. If the donor decides during his/her lifetime that he/she does not need to use the property any longer, there are two options:
- Thrivent Charitable arranges for a joint sale of the property. The donor would receive a portion of the proceeds equal to the value of their remaining life estate interest.
- The donor can deed his/her remaining life estate interest to Thrivent Charitable and receive an additional income tax deduction for that gift.
Additional information
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Our team of charitable gift planners utilizes deep charitable expertise to expand your clients' options and help meet their giving goals. Our collaborative approach will allow you to maintain your current client relationships while we provide the most relevant advice that aligns with your clients' financial priorities.
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