Using Real Estate to Make a Deferred Gift
Some donors are interested in donating real estate, but they also have a need for income and/or use of their homes during their lifetimes. Under the right set of circumstances, the options described below can provide a significant gift to the university as well as financial security for the donor.
Retained Life Estate
If you would like to receive a current income tax deduction for the gift of your home, but want to continue living there for the rest of your life, you can give the university a “remainder interest” in your home and retain a “life estate” for yourself. Donors who choose to make gifts of life estates continue to maintain the property while they are living in it, which includes paying taxes and the cost of any insurance. If at any time you decide to relinquish the life estate, you may do so. If you wish, you may designate how FSU will use the proceeds received from the ultimate sale of the property.
Charitable Remainder Unitrust with Flip Provision (FLIP CRUT)
The Flip CRUT is an income-producing vehicle that can be funded with unencumbered real estate. After donating property into the trust, the property is sold, thereby generating assets that can be used to make income payouts to the donor or a family member for life or for a period of years. The income payout is based on the sales price of the property that was donated into the trust. The Internal Revenue Code has specific rules in place that dictate how these trusts are invested.
Some of FSU’s most significant gifts have come from the estates of our donors. In some cases, the donors have bequeathed real estate to FSU for the purpose of supporting an academic program. As a general rule, the FSU Real Estate Foundation will request that an executor or trustee liquidate the real estate and then distribute the proceeds to the FSU Foundation. However, in certain circumstances, it may be appropriate for a donor to bequeath a specific piece of property to the FSU Real Estate Foundation.