UNIVERSITY OF MINNESOTA FOUNDATION

Real estate

Real estate can be an attractive asset for donors to use in making a gift to the University of Minnesota. Donors may wish to give residences, vacation homes, farms, or undeveloped land. In most instances, the University of Minnesota Foundation will sell the property and the proceeds will be used to support the college, campus, or program designated by the donor(s).

Because each property is unique, the U of M Foundation will need to collect and review information about the property before acceptance. As a first step, contact the U of M Foundation’s planned giving team or the development officer for the program you wish to benefit to discuss the proposed gift.

There are many ways to gift property to the University.

Outright gift

Donors who want to make a gift of real estate and provide an immediate benefit to the University can give property outright. By giving appreciated property that has been held for more than one year, donors can avoid paying capital gains tax on the appreciation. They also receive an income tax deduction for the fair market value of the property, subject to applicable limitations. The U of M Foundation’s policy requires outright gifts of real estate to be approved by the gift acceptance committee, and the real estate must have an appraised value of at least $100,000.

Gift through a will or trust

Donors who want to give real estate to the U but wish to maintain control and use of the property during their life can give the property to the University through their will or trust. They can include a provision in their will or trust giving the specific property or the proceeds from the sale of the property to the U of M Foundation using the following sample language:

"I give [description of property] to the University of Minnesota Foundation, Minneapolis, Minnesota, to be used [for the benefit of the college, campus, or program] or [according to my written instructions on file with the Foundation].”

The planned giving staff at the U of M Foundation can work with you and your attorneys to customize this language to ensure that it accurately reflects your wishes and that the University will be able to use the gift as intended.

Transfer on death deed (TODD)

Under Minnesota law, owners of real estate can give property to the University without the need for probate by using a transfer on death deed. At the owner’s death, the real estate transfers directly to the U of M Foundation. This deed must be filed during the owner’s life in the county where the property is located and may be revoked at any time during the owner’s life. This option is available in many, but not all states.

Charitable remainder trust

A charitable remainder trust is an excellent gift option for donors who wish to support the University while retaining income for themselves or others. Using a type of trust called a flip trust, donors can convert real estate into a higher income-producing asset. By transferring real estate to a trust, the donor receives an immediate income tax deduction and avoids paying any upfront capital gains when the trust sells the property. The trust payments to the donor or others begin after the real estate is sold and the proceeds have been invested in a diversified portfolio. At the end of the trust term, the remaining assets in the trust are used to support the University and other charities designated by the donor.

Retained life estate

With a retained life estate, donors can give their home to the University now but continue to use the property for as long as they wish, either for life or until they choose to sell the property. This gift also offers income tax savings for the donor. Donors receive an immediate partial charitable income tax deduction, subject to applicable limitations, based on the current value of the future gift.

For a retained life estate gift to the University, U of M Foundation policy requires that the real estate has an appraised value of at least $250,000 and the donor must enter into an agreement to pay all maintenance, taxes, and insurance on the property. A retained life estate agreement is irrevocable and requires the approval of the U of M Foundation’s gift acceptance committee.

Disclaimer

Information on this website is not intended as legal or tax advice. For information on how any gift may affect your tax situation, please consult with your own professional advisor.