What is a retained life estate?
A. A retained life estate is a gift plan defined by federal tax law that allows a landowner to donate property to a government agency or land trust while retaining the right to live on it for the rest of their life, a term of years, or a combination of the two. A landowner may also use a vacation home to create this kind of gift. While landowners retain the right to live on their property, they continue to be responsible for all routine expenses – maintenance fees, insurance, property taxes, repairs, etc. If the landowner later decides to vacate their property, they may rent all or part of their property in cooperation with the custodial government agency or land trust. When the landowner’s retained life estate ends, the government agency or land trust can then use the property or the proceeds from the sale of the property for the purpose designated by the landowner.
