You may give the property to Miss Porters School while retaining the right to occupy the residence or operate the farm. Such a gift of a remainder interest provides a charitable income-tax deduction for the present value of the remainder interest that frees up tax dollars into spendable income—without causing any disruption in your lifestyle. In addition, this plan permits you to escape any potential capital-gain tax on the built-in appreciation.

Example: Amy, 75 and recently widowed, has lived in her home for 25 years and has no plans to move. To obtain present tax relief without altering her lifestyle, she gives her home to Miss Porters School while retaining the right to live in the home for life.

At the time of the gift, the residence is appraised at $250,000. This gift arrangement will provide a charitable income-tax deduction of more than $123,214 (the value of the charity's remainder interest). Since Amy's tax bracket is 24%, her total tax savings will be about $29,571 (24% of $123,214). This is the amount by which her income tax will be reduced over the period she reports the deduction.

In the event she decides to move, she will have several options: rent the property, give her life interest in the home to Miss Porters School in exchange for a stream of payments for life, or simply give her life interest outright and receive another deduction.