“Bill” and “Shirley,” compelled by the love of Christ, are generous givers to the church, yet for years they thought about doing something extraordinary. Acting on the advice of their attorney, 10 years ago they took that step by setting up a provision in their revocable living trust to give their house to their church and synod when the survivor passes away.
Meeting with their attorney to update their trust, he suggested that they think about taking advantage of the current tax code by giving the house to now and continuing to live in it. He explained how it works:
They could deed their personal residence to WELS Foundation using a retained life estate agreement. That agreement reserves the right for Bill and Shirley to use the property for the rest of their lives, called a life tenancy. Bill and Shirley will still be responsible for maintenance and repairs, to maintain insurance coverage, and pay property taxes. When the life tenant passes away, WELS Foundation takes possession to finalize the gift and then can sell the house and distribute the funding to the ministries designated by the donors.
The attorney explained that the process was straight-forward. They would get an appraisal on the property to determine its current market value. Their joint life expectancy and other factors are considered to determine the present value of the remainder interest given to WELS Foundation. This amount is the value of the gift that Bill and Shirley can claim as an income tax charitable deduction.
Bill and Shirley were thrilled that, through this arrangement, they would be able to make a significant offering to Jesus and his church at life’s end.
If a retained life estate arrangement sounds like something you’d want to investigate, or if you are considering any gift of real estate, call your local WELS Christian giving counselor at 800-827-5482.