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Eileen and her husband, Paul, enjoyed their house. They had raised their
three children there and had many family memories. But after Paul passed
away, Eileen began to find that the old house was a burden. Without Paul
to take care of things and with their children involved in their own families
miles away, it seemed that the house was too big, too old and even a bit
lonely.
 Eileen:
"Paul always said that I was the solid one. If there was a decision
to be made I could get to the bottom line pretty quickly. Well, the bottom
line was that I needed to make a change for a number of reasons. I decided
to move into a smaller place in town, easier to take care of and one that
was part of a neighborhood where I could make some new friends and be
a part of activities and things. And where my grandchildren could still
come and visit."
"Paul and I had talked about what to do when we got to this stage
in our lives. I just thought Paul would be here with me, but that wasn't
to be. We had planned and knew I would have enough money to live comfortably.
Initially we thought I'd need the money from the sale of the house, but
I really don't."
"My advisor went over the numbers with me. If we sold it, there would
be a large capital gain and taxes to pay. But by putting the house in a trust that then sells it, I avoided having to recognize the taxable capital gain right away. The trust takes all the money from the sale of the house and invests it, and I get the income from the trust
for life. Then, an organization that is doing great things will receive
the remainder of the trust and that will even save some estate taxes."
 Depending
on the circumstances that are involved, gifts of real estate can be an
effective means of planning a gift. Much of the individual wealth in America
is invested in real estate. While the first thought often is a home or
farm, real estate also can involve a vacation or second home, an apartment
or commercial building, a shopping center, or undeveloped land.
Gifts of real estate can enable us to make significant contributions.
Each piece of property and its unique circumstances need to be reviewed
to determine the suitability of the property as a gift. Generally speaking,
a rule of thumb is that an acceptable piece of property is one that can
be readily sold.
Also, there are many ways to donate property. It can be an outright gift,
a retained life estate, or
placed in a trust (such
as what Eileen and her advisor set up). In any case, while we discuss
some generalities here about donating real estate, if you are considering
such a gift to Good Samaritan Hospital, please contact
us to discuss its suitability.
In addition to making a significant contribution, there can be other
benefits for you:
- There may be a charitable income tax deduction that would lower your
income tax.
- If your property has appreciated in value since you acquired it,
there might be a large capital gain tax that would result if you sold
it. By donating the property, you may be able to avoid realizing the
capital gains.
- Depending on your state regulations, you may be able to turn the
property into a gift that is structured to provide income for you and
a beneficiary.
- If the property is your home or farm, you may be able to make a gift
of it now and continue to live in it for the rest of your life and receive
tax benefits the year of the gift.
- If the contribution from your property exceeds the allowable charitable
deduction limits, the deduction may be carried forward for five years.
There can be significant advantages to using property as a charitable
gift. Please contact us to discuss your
unique circumstances.
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