August is national Make-a-Will month and a great time to check in on key components of your estate plan. The reality, as we know, is that all property remaining at death has to go somewhere. And as heartbreaking as it may be for parents of grown children, it’s usually a mistake to assume that you should automatically leave the family home to children in your will or trust. Indeed, your children may not be nearly as attached to your things as you are, and the reality is that they may not want any of them–including the house.
But don’t let this get you down. When one door closes, another door opens. It may be time to explore giving your personal residence to charity. Kitsap Community Foundation can help!
Reach out anytime to discuss the possibilities with the Kitsap Community Foundation team. As we begin the conversation, we’ll evaluate which type of gift format might be a good fit for your situation. For example:
You can certainly deed your house to Kitsap Community Foundation outright. This might be a solid option if you are planning to sell the house in the near future to downsize or move to a retirement community. This is an especially good option if you do not need to rely on the sale proceeds to fund either your next move or your ongoing living expenses. And, if the total value of all your assets is in a range where you could be subject to estate tax, transferring your house to Kitsap Community Foundation takes the home’s value out of your estate, tax free, because of the charitable deduction. Kitsap Community Foundation will likely list the property shortly after you make the gift. Then, the proceeds from the sale will flow into your donor-advised or other type of fund to help you fulfill your charitable goals.
If you’re hoping to get a little money from the sale of your residence, but you don’t need the full amount of its value, you can explore what’s known as a “bargain sale.” This transaction allows you to sell the property to Kitsap Community Foundation at a price below market value, allowing you to receive some income while still making a charitable contribution.
Another option is to transfer your residence using a “charitable remainder trust.” You’d transfer title to the property to the trust, and the trust would provide you with income for the rest of your life (or a term of years). Any remaining value would flow to your fund at Kitsap Community Foundation to support the causes you care about. You’d also be eligible for an up front income tax deduction based on the present value of the amount projected to pass to your charitable fund in the future.
If you’re interested in giving your residence to your fund at Kitsap Community Foundation, our team will work closely with you and your advisors to carefully evaluate the opportunities and walk through all of the steps in the process. For example, it’s important to look at factors such as valuation (which must be documented with a qualified appraisal), whether there’s a mortgage on the property that would make a gift more challenging, how long you’ve held the property and your cost basis, and ensuring that a sale is not already formally or informally in the works.
You’ve spent years making your house a home. We look forward to exploring the possibilities for extending the joy your personal residence brings to you and your family by transforming the property into a source for community benefit.
If you don't have a will yet, now is the time to set one up – for free! You can have peace of mind in as little as 20 minutes by creating your free will today at FreeWill.com/kitsapfoundation.
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