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GiftLaw Pro Home   >  Chapter 3 - Deferred Gifts  >  3.7 Life Estate Reserved  >  3.7.2 Maintenance, Insurance and Taxes (MIT) Agreement  >  Basic Quiz

Basic Quiz - 3.7.2 Maintenance, Insurance and Taxes (MIT) Agreement

1. Because a donor and a charity both jointly own the personal residence or farm, both parties must share the expenses associated with the property in proportion to their ownership interests.
           
2. The "MIT agreement" refers to the mitigation of damages agreement that charity and a donor enter into in the event that something should happen to the personal residence or farm.
           
3. Because charities have a financial interest from the gift of a remainder interest in a personal residence or farm, many charities take the precaution of adding such properties to their master insurance lists.
           
4. The reservation of a life estate by the donor requires that the donor live in the house. Therefore, if the donor should leave the home for any reason, the life estate agreement ends and the property is transferred to charity.
           
5. A donor may retain an estate for a term of years rather than for his/her life.
           
6. It is not permissible for the charity to help the donor with maintenance, insurance or taxes if the donor is unable to do the repairs him/herself, or it was agreed upon prior to the transfer to charity.
           
7. The donor must pay for any and all capital improvements since they are the life tenants.
           
8. A farm may include fixtures such as buildings, grain bins and other permanent improvements.
           
9. The gift of a remainder interest in a home requires the creation of a charitable remainder unitrust to hold title to the remainder interest.
           
10. The MIT agreement usually contains a "hold harmless" provision.