Retained Life Estate

When a Donor Walks Away from a Gift (and the Charity Benefits!)

Have you ever hoped that a donor would walk away from a gift? Why would any gift officer want that, unless perhaps the charity was at some risk of liability as a result of accepting the gift? Your goal is to close gifts – to cultivate and engage the donor with the hope of a (big) gift.  Read about various scenarios in which walking away from a gift makes sense for both parties.

Publication 1459

Publication 1459 is a book of federal tables used to compute retained life estate deductions. The edition that contains tables based on Table2000CM. It is available on the Web. The edition that contains tables based on Table 90CM is called Actuarial Values, Book Gimel. The edition that contains tables based on Table 80CNSMT is called Actuarial Values, Book Alpha.

Depreciable Portion

In the context of planned giving, "depreciable portion" is relevant to retained life estatesRetained_Life_Estate only. The depreciable portion is the value of the buildings and should be listed separately in a qualified appraisal of the real estate. In most cases, the only building in a retained life estate is a house.

You must know the depreciable portion to compute the deduction for a retained life estate.

In contrast, the undepreciable portion is the value of the land that comes with the buildings in a retained life estate.

It’s a Great Time to Consider a Retained Life Estate

For many donors, their home is their most valuable asset. They most likely plan to live there for many years and it would never occur to them that they could use their home to make a charitable gift. Likewise, there are many donors with a valuable second home that they continue to use regularly and have never considered giving to charity. In both cases, the retained life estate may offer the key to unlocking just such a gift.