MAKING A GIFT OF REAL ESTATE USING LIFE ESTATE RESERVEDMAKING A GIFT OF REAL ESTATE USING LIFE ESTATE RESERVED

With a gift of a personal residence, vacation home or farm to the Lutheran Community Foundation (LCF), you can retain a “life estate” in the property. Donors sign a Life Estate Agreement and a deed, which transfers immediate ownership of the real estate to the LCF; however, the deed states that the donor retains the right to use the property for their lifetime(s). At the end of the donor’s life, the LCF takes immediate possession of the property. The property is sold and the net proceeds are allocated to the donors’ charitable fund at the LCF.

The gift minimum is $100,000.

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.

Tax and Financial Benefits for your clients

  • The 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.
  • Donor can use or rent out the property until their death, at which time the LCF takes possession of the property.
  • The property given is not subject to probate.
  • The LCF sells appreciated assets tax-free.

Benefits to You, the Financial Representative

Helping your clients give through the LCF not only simplifies your work, you’re also compensated for your efforts. Charitable gifts that come to the LCF through the work of Financial Representatives are invested in Thrivent investment products or American Funds, and you receive the corresponding compensation from those companies. Find out more about compensation for Financial Representatives.

You don’t need any special qualifications to facilitate gifts to the LCF, and we support you with the tools and information necessary to complete your client’s gift.

More about Gifts of Real Estate with Life Estate Reserved

After the LCF takes possession of the property, it is sold and the net proceeds are allocated to the donor’s charitable fund at the LCF. If the donor decides during his/her lifetime that he/she does not need to use the property any longer, there are 2 options:
1) LCF 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.
2) The donor can deed his/her remaining life estate interest to LCF and receive an additional income tax deduction for that gift.

How to Make a Gift of Real Estate with Life Estate Reserved

  1. Request a personalized illustration for your client by calling 800-365-4172. To create a customized illustration for you and your client, we need the following information:
    • Client's name, birthdate and tax bracket.
    • Proposed gift amount including cost basis. Please distinguish between value of land and value of buildings and other improvements.
  2. The LCF sends you an illustration packet to review with your client.
  3. If your client wishes to proceed and establish a gift of real estate, complete and return the Fund Workbook, Real Estate Worksheet and Environmental Questionnaire included in the illustration packet.
  4. To ensure prompt and accurate compensation from Thrivent, complete the FR compensation form.

Resources to Support Your Work

You may also order these materials online, using our Request Materials form.

For more information about Life Estate Reserved and other giving options available through the LCF, please call 800/365-4172.