income from life estate agreement

income from life estate agreement

Forum topic posted in Forum on 18 May 2010| 2 comments
audience: | last updated: 18 May 2010
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Joined: 01/08/2009
Points: 30
Outside of a bargain sale of remainder interest in a personal residence, can anyone tell me how a donor can receive income or paybacks from a life estate agreement?

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Offline
Joined: 04/06/2004
Points: 90
Income from a gift of remainder interest in residence
Lynda L. Sands If there is a willing charity, the remainder interest can be exchanged for a gift annuity (check state regs on reserves). That will allow the life tenant to have an income. Or the life tenant can rent out all or a portion of the premises. In a pinch, and if the life tenant can move out (or move out and rent back), the life tenant could agree with the charity to sell the whole property and split the proceeds actuarially. There are no doubt other techniques, given some real consideration of exactly what problem the donor/life tenant is trying to solve.
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Joined: 02/06/2008
Points: 15
income from RLE
I am working on one of these now and have decided that the preferred way to go is a FLIP-CRUT. Of course the donor would have to move however the income flow to the donor would be more than enough to secure a residence elsewhere. One other thought would be to enter into some sort of a reverse mortgage situation with the donor. You would probably need the property to be unencumbered to make this work. I had orginially thought that at some point in time during the RLE the donor could donate his interest to my nonprofit and secure a CGA. However unless it was concurrent with the property sale there would be no equity to fund the stream of payments.
7520 Rates: October 2.2% September 2.4% August 2.4%

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