3 Key Things to Remember About a Retained Life Estate

Know the Essentials

Generally speaking, retained life estate agreements are great gifts for donors who desire to spend their final years in their current residence, but also want to make a major gift. Among other things, a RLE gift may be good for donors who want to participate in a campaign but might not be inclined to do so with an outright current gift. 

They get to make a large gift to your nonprofit now, and enjoy a current and potentially substantial charitable income tax deduction, yet continue to live in the property.

You don't have to be a gift planning expert. You just need to know what to listen for and what to share with your donor in initial conversation. Then, if needed, you can bring in other people to help take it further.  

In order to have an initial conversation with a potential benefactor about an RLE, you need to remember these things:

  1. An RLE is an irrevocable transfer of a personal residence or farm by a person (or persons) to a charitable organization.
  2. The donor gets a current income tax deduction based on a calculation beginning with the value of the property.
  3. The donor retains the beneficial use of the property for his or her lifetime (or for a shorter term specified in the instrument of transfer), meaning, they can live there as long as they want, or until they die. 

That's pretty much the gist of it.  

If they are interested, you need to find out more of course, which you can find in these pages of the Gift Planning Field Guide. And, the more you know the more value you will bring to the relationship.  

Check out these pages about the Retained Life Estate.