Planned gifts are special donations that involve giving part of an estate, a charitable trust, an IRA or pension fund. Often a planned gift requires consultation with a financial advisor and the Director of Gift Planning. These major gifts will have a significant impact on The Ethel Walker School's mission, while increasing the financial stability of our endowment. Planned gifts are also great vehicles for honoring friends, faculty and family. For more information, please contact Suzanne Turcotte, Director of the Fund for Walker's, at sturcotte [at] ethelwalker [dot] org or (860) 408-4259.
The Ethel Walker Heritage Society
The Ethel Walker Heritage Society recognizes donors who have established a current or future planned gift at Walker's. Members of this esteemed group are listed in our annual report but may elect to remain anonymous. Alumnae who have remembered Walker's in their will, IRA or estate plan, are encouraged to document their bequest intention so that these gifts will be counted in the Centennial Campaign. Planned giving donors play a leadership role in securing the future of Walker's graduates for generations to come.
Matured Bequests and Bequest Intentions
At the time of a donor's death a matured bequest is distributed to Walker's through a will, an IRA or other estate vehicle. The fair market of a matured bequest is deductible in determining a taxable estate for estate tax purposes. This charitable bequest may be a:
- Percentage of one's estate, or a specific dollar amount,
- Stock, bond or mutual fund portfolio,
- Piece of real estate,
- Or the remainder of a trust or estate after providing for loved ones.
For sample bequest language to share with your attorney, please print out the PDF entitled "Including The Ethel Walker School in your Estate Plan".
Alumnae who remember Walker's in their estate plan and are willing to document their intentions will receive campaign "credit" and recognition in the Ethel Walker Heritage Society. These important commitments enhance our endowment and encourage others to make Walker's a top charitable priority. To document your bequest please print out the PDF form on this page entitled "Bequest Intention Acknowledgment Form" and return it to Suzanne Turcotte, Director of the Fund for Walker's.
Charitable Remainder Trusts
A charitable remainder trust is a separately managed trust that is often funded with appreciated securities to shield the inherent capital gains tax. The beneficiary will receive approximately 5% of the principal annually, through quarterly payments for her lifetime. A charitable deduction is generated in the year the trust established, based on the age of the income beneficiary and the payout rate of the fund. If you would like The Ethel Walker School to help you create this type of charitable gift, a minimum gift of $250,000 is required.
A "short term" charitable remainder trust may be set up for a period of years to allow for quarterly tuition payments to grandchildren. The donor will received the charitable deduction in the year the trust is created, while the grandchild would receive the income payments. Gift tax may apply, so it is important to discuss this gift with your tax advisor prior to establishing the trust.
In both cases, the trust remainder will come to The Ethel Walker School to support the endowment in your honor. View the Outside Remainder Trust Confirmation form to let us know that you have established a trust for the benefit of Walker's.
Did you know that under current tax law, it may be advantageous for alumnae to consider leaving an IRA or part of a retirement plan to The Ethel Walker School? This is because pensions and IRAs are "income in respect of a decedent" or "IRD" property. Inherited property is usually exempt from income tax but IRD property is not. Unlike appreciated securities or real estate, IRAs and pension funds carry income tax that must be paid by the person inheriting the asset. This is not the case if IRD property is left to charity.
Traditionally, retirement plans and IRAs left to a spouse may be "rollover over" tax-free into a spouse's IRA, allowing the the income tax to be paid only as the spouse receives the income.
If you decide to leave a portion of your IRA or pension to Walker's, it may be best to segregate the charitable part into a separate IRA, naming yourself as the first beneficiary and The Ethel Walker School as the second beneficiary. This way it will be evident to your executor which portion goes to charity and which portion goes to family, thus clarifying the subsequent tax treatments.
Charitable Lead Trusts
Instead of paying the donor an income for life or a period of years, a charitable lead trust pays the charity income for a number of years. At the end of the trust's term, the principal reverts back to the donor or other designated beneficiary. A charitable lead trust is one mechanism used by high net worth individuals who want to direct an annual income to their favorite charity, while using the trust as part of an overall estate planning tool. Some charitable lead trusts are used to eventually pass assets onto another generation. A "grantor" lead trust may be used when a donor wants to accelerate a charitable deduction into the current tax year, with the assets ultimately returning to the donor's portfolio. There are many types of lead trusts that will meet individual estate planning goals, each with a different gift and income tax ramification. Please consult your financial advisor to see if a charitable lead trust would complement your estate plan and help Walker's too.
Real Estate Gifts
Some alumnae and friends may be in a position to consider donating real estate to The Ethel Walker School. Even though the Taxpayer Relief Act of 1997 allows married couples to shield up to $500,000 (and up to $250,000 for an individual) in capital gains when they sell their home, there are still charitable and tax incentives to make this type of gift attractive.
If an alumna has an unmortgaged, marketable property that she would like to donate to Walker's, there are several ways to complete this gift. (In order to make this complicated transaction easier, we are happy to provide our "Steps for Making a Real Estate Gift Guidelines" available upon request.) This information outlines the review process that we will take to determine if gift acceptance is financially prudent for both parties.
There are several ways to donate gifts of real estate:
Outright Gift of Real Estate
If a donor would like to donate a home to The Ethel Walker School, the property would be deeded to the school and subsequently sold. The donor receives an income tax deduction for the appraised value of the property. It is important to note that the donor would be asked to pay for the appraisal and carrying cost until the property is sold.
Retained Life Tenancy
In this case, ownership of the property is transferred to The Ethel Walker School, but the donor retains the right to use the property for her lifetime. Upon the death of the donor, Walker's will take full possession of the real estate and sell it. The donor would be asked to bear the cost of the appraisal and upkeep of the property (for example the real estate tax and maintenance) while she is residing in the residence.
Funding a Trust with Real Estate
If an alumna would like to deed property to a charitable remainder trust, with the understanding that the property will be sold and the proceeds used to fund the trust, income will be generated for the donor's lifetime. The donor would be asked to bear the costs of the appraisal and upkeep of the residence until it is sold. At the death of the donor or beneficiary, the assets in the trust will pass to The Ethel Walker School.
Gifts of Life Insurance
Some alumnae have "paid-up" life insurance policies with "cash surrender values" and no longer need the policy to protect their loved ones. If that is the case, please consider donating your life insurance policy to Walker's. By making The Ethel Walker School the "sole owner and beneficiary" the gift transfer will be complete. Once the policy is irrevocably transferred we will "cash it in" and put the funds to work immediately to benefit the School.
It is important for any donor to consult with his or her personal financial advisor, attorney, or accountant regarding the form, structure, and documentation of a planned gift. Planned giving donors also are asked to notify the School so that their commitments can be appropriately credited and acknowledged. Both outright and deferred planned gifts may be used, upon receipt, to create named funds. Or, if the donor prefers, these gifts may be anonymous.
Including The Ethel Walker School in your Estate Plan
Bequest Intention Acknowledgment Form
Charitable Remainer Trusts:
Outside Charitable Remainder Trust Confirmation
Sample IRA Letter:
2013 Sample IRA Letter