One question I hear a lot is, “Can I donate my land trust to a charity?” The answer is yes—but it’s not the deed itself you donate, it’s the beneficial interest in the land trust. That way, you still protect the charity from liability while giving them full control to sell the property and put the funds to good use. If you’re holding appreciated real estate in a Florida land trust and want to support a cause while taking advantage of a charitable deduction, this is one smart strategy to consider.
Show Transcript:
A big question we often get is, can I donate my beneficial interest in my land trust to a charity?
Hi, I’m Joe Seagle, your real estate asset protection lawyer here in Orlando, Florida, with MyLandTrustee.com — the largest and oldest land trustee in the state of Florida. This is a question we hear a lot: Can I donate my property to a charity?
The short answer is absolutely. Just like many people donate appreciated stock to avoid capital gains, you can also donate your beneficial interest in a land trust. When you donate appreciated stock, the charity can choose to sell it, hold it, or earn dividends from it — and you get the charitable deduction without paying capital gains tax.
The same principle applies to a land trust. If you have real estate held in a land trust that’s significantly appreciated — or if you’re a foreign investor facing FIRPTA (the Foreign Investment in Real Property Tax Act) — you can donate your beneficial interest to a qualified charity instead of selling the property and paying the tax.
Here’s how it works: your attorney or trustee coordinates with the charity (and often the charity’s lawyer) to have them accept an assignment of the beneficial interest in your land trust. Once that’s done, the charity becomes the beneficiary of the trust — and thus controls the property — without taking title directly.
Because the beneficial interest is considered personal property, the charity receives it just like they would a gift of stock or furniture. Most charities will sell the property fairly quickly to free up the cash for their programs, but they remain protected while it’s in the trust.
That’s another major advantage: liability protection. When you donate the beneficial interest instead of deeding the property outright, the charity isn’t directly on the title — meaning it’s shielded from potential liability like accidents, dog bites, or injuries that might occur on the property before it’s sold. The land trust structure maintains that layer of asset protection until the property changes hands.
So, if you have appreciated property you no longer need, and you’d like to make a charitable contribution, consider donating your beneficial interest in the land trust instead of the real estate itself. Talk to the charity first, have them coordinate with your trustee, and get a qualified appraisal before finalizing the donation.
You’ll be supporting a cause you care about, reducing taxes, and keeping everyone protected in the process.
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March 11th at 6:00 pm
