Real Estate

Gifts of real estate – particularly real estate that has appreciated in value over the years – can be a wonderful way to fulfill your charitable desires while also addressing your financial planning needs. For some, a carefully designed gift of real estate can also offer a way to become free of the burdens of owning and managing a property that may no longer serve the same useful purpose it once did. Properties suitable for use as gifts to Vassar include:

• Primary residences
• Vacation/second homes
• Investment properties
• Inherited farms or ranches
• Fractional interests in properties, etc.

Gifts of real estate can be structured in a wide variety of ways to address a whole host of tax planning concerns, retirement income needs, estate planning priorities, etc. Vassar has the expertise to work with you and your family, and your advisors, to design some creative approaches to fit a variety of situations.

Outright Gifts of Real Estate

An outright gift is the simplest and most straightforward way to make a gift of real estate to Vassar. Such a gift provides maximum benefit to the College because the full value of the asset can be put to work immediately in accordance with your wishes, as soon as the property is sold. Assuming the property you gift has been held for more than one year, your outright donation may generate a charitable income tax deduction equal to the appraised fair market value of the property (as determined by a "qualified" appraisal). Such a donation also allows you to avoid the capital gains tax that would otherwise have been due on sale of the property. The value of the property would also be removed from your taxable estate.

Retained Life Estate

Perhaps you would like to consider giving your home to Vassar but you plan to continue living there for the remainder of your lifetime. You could of course, simply bequeath the property to Vassar through your will or you might consider another more creative option. A Retained Life Estate arrangement allows you to deed over your residence – primary residence or vacation home – to Vassar but retain the right to use the property for the rest of your life (and the life of a survivor, if appropriate). Such a Retained Life Estate arrangement allows you to continue to use your property, living, entertaining, etc. as if nothing has changed. You also continue to pay taxes and utilities, and receive rent (if applicable) as before, except that this arrangement also generates an immediate charitable tax deduction for you. Upon your death, possession of the property transfers to the College, which will sell it and use the proceeds in accordance with your wishes. Some alumnae/i and friends who have contemplated leaving property to Vassar through their will have decided instead to use a retained life estate arrangement, because, unlike a bequest, this arrangement generated an income tax deduction, and allowed them to enjoy recognition during their lifetimes for this thoughtful future planning.

Income for Life from a Property

It may be important to you to find a way to convert the equity in your home or other real estate into a stream of income for life. One way this can be done is by funding a charitable remainder unitrust with real estate. Once such a trust is established, the trustee (you, Vassar, a bank or other financial institution) sells the property without incurring any capital gains taxes, invests the proceeds, and begins making lifetime income payments to you (or the other named income beneficiaries). At Vassar, such trusts are typically designed to make payments of 5% or 6% of the trust’s value annually. (For more information on how unitrust income payments are determined, click here.) When the trust terminates at your death, the remaining funds inside the trust become available to Vassar to put to use in accordance with your wishes.

Give Us a Call

If you are looking for creative ways to dispose of your real estate in a way that would help you and Vassar College, please give us a call. We would be glad to explore a range of options designed to fit your particular circumstances. Please Alexas Orcutt with the Gift Planning Office at (845) 437-5487 or (800) 443-8196, or complete our information request form for more detailed information.

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