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| THE CHARITABLE LIFE-ESTATE DEED In order to encourage gifts to charity, the tax law is very generous to a person who wishes to leave his home or farm to charity at his death. If he makes an irrevocable transfer of his home or farm to charity at his death via the life estate deed, he receives an income tax deduction in the year that he makes that irrevocable decision. An 82-year-old gentleman came in for estate planning one day and indicated that he wanted to do more for our cause. He said, "My wife and I had no children ... and she died of cancer just two years ago." He continued, "My estate is worth about $2 million and my only relative is a niece." Upon reviewing his estate, I noted that he had a home worth about $500,000. I said, "Why don't you deed the house so that it will pass to our cause at your death." I went on, "At present, nothing will change. You will continue to live in it and take care of it. But, when you die, it will belong to our cause ... with no probate, no estate tax and no complications." Then, I gave him the really good news, "You will get an income tax deduction of nearly $250,000." Although he could not use the entire $250,000 deduction in one year, he has an additional five years in which to use it. He loved the simplicity of the plan ... and adopted it. If you would like to leave your farm or home to "The Foundation", talk with your real estate lawyer and tell him that you want a life estate deed with the remainder to go irrevocably to us. |
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