More about Retained Life Estate

A retained life estate deed allows you to donate your personal residence (such as a home, cabin, or farm) while retaining the right to live on and use the property for the rest of your life, a term of years, or a combination of both. In exchange for your remainder interest gift, you receive an immediate income-tax deduction.

How does a retained life estate work?

This creative gift plan transfers your deed to the Mercy Foundation but reserves a free lifetime tenancy to you, enabling you to make a significant gift to the Foundation, yet not disturb your living arrangements or your cash flow.

You will continue to be responsible for the property's ongoing taxes, structural maintenance and upkeep. Also, you and the Mercy Foundation will mutually agree about what to do if you no longer wish to live in the property after you have donated it, or if you become physically unable to continue living there. You will receive a charitable income-tax deduction, based on the fair market value of your house minus the present value of the life tenancy you have retained.

I am contemplating this arrangement. What are some considerations I should be aware of?

• the Mercy Foundation must first review and approve the transfer.
• You will need to secure an independent appraisal of your property to establish its value for the deduction.
• If a mortgage or lien is on your property, it will complicate the transfer to the Mercy Foundation and could result in taxable income to you. The Foundation can advise you on all these matters.

What are the benefits?

Your exact benefits will depend on the value of property you are contributing, its condition, your age, and other market factors. However, this example will give you a better sense of the retained life estate benefits.

For assistance with this gift plan, please complete the request information form or contact the Mercy Foundation at (209) 564-4200 or e-mail to MercyFoundationMerced@DignityHealth.org.

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