A legal structure allowing a donor to retain possession while transferring property ownership is known as what?

A legal structure that permits a donor to retain possession while transferring property ownership is known as a life estate. In the context of a life estate, the donor—the life tenant—has the right to use and enjoy the property during their lifetime. Upon the death of the life tenant, the property is transferred to the remainderman, the individual or entity designated to receive the property thereafter.

This arrangement is beneficial as it allows the donor to maintain control and use of the property while ensuring that ownership eventually passes to another party. It is an effective estate planning tool that can be used to avoid probate and preserve assets for future generations while providing flexibility to the life tenant during their lifetime.

The other options, although related to property transfer and ownership, do not capture the specific arrangement of retaining possession while transferring ownership. For instance, a donation inter vivos refers to a gift made during the donor's life, without the retention of a possessory interest. A contingent donation is dependent on the occurrence of a future event, which does not provide the same immediate retention of possession. Lastly, a trust agreement involves a fiduciary arrangement but does not specify the same direct retention of possession by the donor, making life estate the correct answer.