Okay, this may be surreal ends of the spectrum, but here’s the scenario: Hugh Hefner wants to sell the Playboy Mansion in LA for $200 million – with the caveat that he live there for the rest of his life.
Sound familiar? Do you know a donor who has donated a farm to charity provided that they can live in the farmhouse the rest of their life?
Both scenarios can be done through a “gift of a remainder interest in a personal residence.”
From the Planned Giving Design Center:
A gift of a remainder interest in a personal residence or farm is described generally as a transaction in which an individual irrevocably transfers title to a personal residence or farm to a charitable organization with a retained right to the use of the property for a term that is specified in the gift agreement. At the conclusion of the measuring term, all rights in the property are transferred to the charitable remainderman.
Gifts of a remainder interest in a personal residence or farm can be measured by the life of one or more individuals, by a fixed term of years, or by a combination of the two. They are, however, most frequently established to operate for the life or lives of the residents of the contributed property. Accordingly, they are frequently referred to as “life estate agreements.”
Wacky idea for Hef? Sure! Would the lawyers have a field day setting this up? Absolutely! Would a charity actually accept the Playboy Mansion? Maybe…maybe not. Lots of details would need to be worked out.
BUT the concept remains the same whether you have a farmhouse, beach house, condo, or a mansion – donate the property during your lifetime, retain residency, then ownership of the property transfers to the charity of your choice upon your death. If you are getting older and don’t want the property in your estate, this maybe a perfect option for you. It definitely reduces the taxable assets of your estate.
If you live in Grundy County (or have strong connections to it), please contact the Community Foundation of Grundy County to see how your “gift of a remainder interest in a personal residence” can start a donor-designed fund to meet your charitable goals, whether it’s a donor advised fund, designated fund, scholarship fund, or field of interest fund.
There are a number of ways to use the Foundation to meet your charitable goals and we can help you design them for greatest impact!
Community Foundation of Grundy County
520 W. Illinois Avenue
Morris, IL 60450