Using Your Home to Fulfill Philanthropic Goals…And Finance Your Retirement
Historically, real estate has proven to be a solid investment. It can also be a powerful philanthropic tool when planning your estate and financial goals.
Erika Davis recently moved to a retirement community and was downsizing. As a result, she had listed her Santa Barbara home but was receiving little response. Her home comprised a significant portion of her estate, and she was counting on the equity in her retirement years.
A chance conversation with another UC Santa Barbara donor who had been in a similar position led Erika to call the Office of Major Gift Planning and inquire about how she could gift her property to the campus and create an income stream for herself at the same time.
Within three weeks, Erika was able to deed her house to the university in exchange for a Charitable Gift Annuity. The gift annuity guarantees Erika an annual return of 7.7% for the rest of her life, regardless of market conditions or interest rate changes. In addition to a secure income stream, Erika received a significant tax deduction which she can carry-forward up to five years.
Erika's generosity will ultimately create the Richard and Erika Davis Scholarship Fund for deserving undergraduate students at UC Santa Barbara. "My husband was a lifelong educator, and we believe strongly in the value of higher education. Honoring his memory through a scholarship creates a lasting difference in the lives of students." And because the sale of her home yielded more than the gift annuity value, the campus can begin to award scholarships as soon as next year, allowing her to see the true impact of her largesse.
Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. California residents: Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. Oklahoma residents: A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. South Dakota residents: Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.