If you are like most people, your home represents the single most important investment you will ever make. That’s why you also should make it an important consideration when building an estate plan. Many people have discovered that making a gift of their home can be the key to combining their personal financial and philanthropic goals.

By donating your residence to the Saint Francis Foundation through the Life Estate Gift Annuity Program, you not only receive a charitable deduction on your current income taxes, but you also gain a secure lifetime income. In addition, you can continue to use and enjoy your property throughout your lifetime. Take a look at the following answers to some of the most frequently asked questions about the Life Estate Gift Annuity Program, and then consider whether this program is right for you.

A life estate gift annuity allows you to give your home to the Saint Francis Foundation today while continuing to live in the home and enjoy it. Specifically, you make a gift of a "remainder interest" in your property and retain a "life estate" in the property. In conjunction with this gift, you enter into an agreement with the Foundation, which provides you with a lifetime annuity based on your age and the value of the "remainder interest" that the Foundation will receive. This arrangement has significant advantages over a commercial "reverse mortgage." With a reverse mortgage, there is no income tax deduction, and income is payable only for a stated period of time, after which your options for use of the property can be severely restricted.

A life estate is an interest in a property that you retain during your life, the life of another, or a set number of years (called "an estate for years"). When you give Saint Francis a remainder interest, you retain a life estate in the home, enjoying all the benefits and carrying out the responsibilities of ownership.

A remainder interest is the right to receive that property in the future: after your death or the death of another person (such as a spouse), or after a certain number of years. This future interest has a value today, as determined by the Internal Revenue Code. When you contribute a remainder interest to the Foundation, you may take an income tax charitable deduction equal in value to that remainder interest. In addition, it is possible to receive an annuity from the gift, just as if you had contributed stocks, bonds or cash.

A number of factors determine the gift’s value: the fair market value of the property (less 20% for expected selling expenses and market fluctuations), the age(s) of any person(s) having the right to enjoy the property before it passes to the Foundation, and an assumed interest rate (published each month by the U.S. Treasury Department).

The property must be a personal residence (including second homes or vacation homes). Remainder interests in apartment or office buildings or other commercial properties are not suitable for this arrangement. Such commercial properties can be donated, however, through other income-producing gift arrangements.

As a donor, you remain liable for any mortgage on the property and must clear the property of any encumbrances prior to making the gift. As a life estate owner, you continue to be responsible for all usual expenses incurred in maintaining the property, including maintenance fees, insurance, property taxes and repairs. Your rights and responsibilities are defined in a Life Tenancy Agreement entered into with the Foundation.