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Agreement Of Donor Of Income Producing Property
(Life Tenant Donee, and Remainderman Donee)
AGREEMENT made [date] among [name], residing at [address]
(the Donor), [name of institution], a religious corporation chartered
by the State of [state], having its principal offices at [address]
(the Life Tenant), and [name of institution], an educational
institution chartered by the State of [state], having its principal
offices at [address] (the Remainderman).
WHEREAS, the Life Tenant and the Remainderman are tax-exempt
organizations under Section 501(c)(3) of the Internal Revenue Code; and
WHEREAS, the Donor owns an office building located at [address],
in fee simple, more fully and completely described as: [description]
(the Property); and
WHEREAS, the Donor wishes to contribute a tenancy during the
Donor's life in and to the Property in favor of the Life Tenant and the
remainder interest in and to the Property to the Remainderman;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Conveyance of an Undivided Interest in the Property. The
Donor will convey all of his right, title, and interest in and to the
Property to the Remainderman, reserving a tenancy during the Donor's
life in favor of the Life Tenant, by deed duly executed and suitable for
filing with the appropriate recording officer on or before [date].
2. Payment of Filing Fees and Taxes. All recording fees,
transfer taxes, attorney fees, and all other expenses incurred in
connection with the aforesaid conveyance shall be paid by the Donor.
3. Management of the Property. The Property will be managed
by the Donor or the Donor's designee during the Donor's lifetime. Upon
the Donor's death, the Property will be managed by the Donor's Executor
or Administrator or such Executor's or Administrator's designee until
final distribution of the Donor's estate is made. So long as the
Property is managed in accordance with the provisions of this Paragraph
3, all decisions made by the manager with regard to the management of
the property shall be final and not subject to challenge by any of the
parties hereto except for losses resulting from the manager's willful
misfeasance or bad faith.
4. Payment of Taxes, Maintenance, and Other Ownership Costs.
The Donor will pay all the expenses of ownership of the Property
including, but not by way of limitation, real property taxes, special
assessments, maintenance, repairs, and management fees so long as the
Donor is alive. The Donor also will maintain fire and liability
insurance on the Property in an amount sufficient to save the Life
Tenant and the Donee from harm.
5. Division of Income From the Property. All gross receipts
derived from the rental or any other use of the property during the
Donor's lifetime shall be distributed to the Life Tenant quarterly. The
amount of the distribution shall be determined by the firm of [name],
Certified Public Accountants or such other Certified Public Accounting
firm as may be designated from time to time by the Donor or the manager
of the Property (if the Donor has appointed another person as manager in
accordance with Paragraph 3 hereof). The decision of such Certified
Public Accounting firm shall be final and not subject to challenge by
any of the parties hereto. The Life Tenant's right to receive such gross
receipts shall end on the last day of the calendar quarter immediately
preceding the date of the Donor's death. The Life Tenant may use such
receipts for its general purposes provided such use does not adversely
affect the Donor's right to deduct the fair market value of the
conveyance of the life estate to the Life Tenant or the payments by the
Donor of the expenses of ownership of the Property as charitable
6. Sale of the Property. At any time following the aforesaid
conveyance, the Life Tenant and the Remainderman may elect to sell the
Property for such price and on such terms as they deem proper. In such
event they will pay all the expenses involved in the sale in the same
ratio as they share the proceeds of the sale.
7. Disposition of Proceeds of Sale of the Property. The Life
Tenant and the Remainderman shall share the net proceeds of any sale of
the property or the income from any purchase money mortgage taken by
them from the purchaser of the Property in accordance with the values of
their respective interests on the date of the sale computed on an
actuarial basis as determined by [name], Certified Public Accountants,
whose decision shall be final. Both the Life Tenant and the Remainderman
may use their respective shares of the net proceeds of the sale of the
Property or the income from the purchase-money mortgage for their
general purposes provided such use does not adversely affect the Donor's
right to deduct the fair market value of the conveyance to the Life
Tenant and the Remainderman or the payments of the expenses of ownership
of the Property during the Donor's lifetime as charitable contributions.
8. Appraisal of Property. The Donor has had the Property
appraised by [name of appraiser], a person qualified to appraise
commercial real estate, on [date]. [name of appraiser] has found the
Property to be worth ---------- dollars ($----------). A copy of the
appraisal is annexed hereto as Schedule A [omitted]. On or before
[date], the Donor will submit a completed Internal Revenue Form 8283
to the Life Tenant and the Remainderman containing a summary appraisal
of the Property showing its value to be ---------- dollars ($----------)
signed by [name of appraiser]. The Life Tenant and the Remainderman
will promptly sign the submitted Form 8283 and return it to the Donor so
that the Donor may attach the Form to the Donor's Federal Income Tax
Return for 20--.
9. Agreement Binding. This agreement is binding upon the
parties thereto, their heirs, personal representatives, successors, and
IN WITNESS WHEREOF, the parties have signed the Agreement that day
and year first above written.
[name of institution (life tenant)]
[name of institution (remainderman)]
This Section for Notary:
State of _________
County of ________ [COUNTY]
On [DATE] before me, [NAME OF NOTARY], notary, personally appeared [NAME OF PERSON(S) INVOLVED], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
My commission expires: _____