More accurately known as a gift of the remainder interest in a personal residence or farm, the retained life estate allows a donor to make a gift of a personal residence while retaining the right to enjoy the property for the remainder of his or her life and/or the lives of others. The donor qualifies for an income tax charitable deduction at the time the gift is made, effectively removing the value of the property from the donor's estate without changing his or her lifestyle.

After the donor and Colby agree on a gift, the donor deeds the property to the College, retaining the right to enjoy the property for his or her life and the lives of any others agreed upon (spouse, children, etc.). The donor signs a contract acknowledging that he or she remains responsible for the real estate taxes and maintenance and upkeep of the property. Colby acknowledges receipt of the gift. Thereafter the donor may continue to live in the property, rent it, or allow others to use it. If the donor decides that a sale is desirable, Colby must be consulted. Assuming the College agrees, the sale moves forward, and the proceeds are divided based on the ratio of each party's interest in the property.

A retained life estate can be an attractive way of supporting Colby and of dealing with a home or cottage that one's heirs are not interested in owning.