Could Your Client’s Vacation Home Become Their Greatest Charitable Legacy?

Over the course of your career, you’ve likely worked with clients who own a lake house, mountain cabin, beach cottage, or family farm. These properties are often filled with decades of memories where grandchildren learned to fish, cousins gathered every summer, and family traditions took root.

But eventually, many clients begin asking a different question:

“What happens to the property after we’re gone?”

Sometimes the next generation has moved across the country. Sometimes the costs and responsibilities of maintaining a second home have become burdensome. And sometimes, despite the memories, the children simply aren’t interested in owning the property.

When these conversations arise, they can create an opportunity to introduce a charitable planning strategy that many clients—and even many professional advisors—have never considered: a retained life estate.

What Is a Retained Life Estate?

A retained life estate allows a client to make a completed charitable gift of a personal residence or farm while retaining the legal right to live in or use the property for the rest of their lifetime.

Because the gift is completed during the donor’s lifetime—even though they continue using the property—they may also qualify for a current charitable income tax deduction based on the present value of the charity’s future interest. As always, clients should consult their legal and tax advisors regarding their specific circumstances.

While the strategy has existed for decades, it often goes overlooked. Yet, it can be an excellent option for clients who own highly appreciated vacation homes, family farms, hunting properties, or second residences that no longer fit comfortably into their family’s long-term plans.

How It Works

The concept is surprisingly straightforward.

• The client transfers ownership of the property to the Community Foundation for Greater Atlanta (or another qualified public charity) through a retained life estate deed.
• The client retains the right to live in or use the property for the rest of their lifetime.
• The client continues paying property taxes, insurance, maintenance, and other expenses, just as they always have.
• Upon the client’s death, the Community Foundation takes ownership of the property, typically selling it and using the proceeds to support the charitable causes the client has chosen.

For many donors, this creates the best of both worlds: they continue enjoying a cherished property while knowing it will someday support the charitable legacy they envision.

Questions to Ask Clients

A retained life estate isn’t the right solution for every client, but asking a few thoughtful questions can help determine whether the strategy deserves a closer look.

• How important is it that this property stays in the family?
• Have your children expressed interest in owning or maintaining it?
• If the property were eventually sold, what impact would you like those proceeds to have?
• Could this property become part of your charitable legacy while you continue enjoying it during your lifetime?

Even when a retained life estate isn’t ultimately the right fit, these conversations often lead to broader discussions about family priorities, estate planning, charitable giving, and legacy.

Helping Clients Create Lasting Legacies

Every family property has a story. For some clients, a retained life estate offers an opportunity to preserve the enjoyment of a beloved home while creating a charitable legacy that reflects the values those memories helped shape.

If you have a client who owns a highly appreciated second home or family farm and is beginning to think about the property’s future, don’t assume the only options are keeping it or leaving it to the next generation. A retained life estate may open the door to a meaningful charitable planning conversation.

The Community Foundation for Greater Atlanta is here to help you explore whether a retained life estate—or another charitable giving strategy—aligns with your client’s philanthropic and financial goals. Reach out to a member of our team.