Create a legacy.

Alumnae who remember The Ethel Walker School 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 The Ethel Walker School a philanthropic priority. To document your bequest, please contact Assistant Head for Advancement Gretchen Orschiedt at gorschiedt@ethelwalker.org or +1-860-408-4260.

At the time of a donor’s death a matured bequest is distributed to The Ethel Walker School 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 contact Assistant Head for Advancement Gretchen Orschiedt at gorschiedt@ethelwalker.org or +1-860-408-4260.

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 “roll over” tax-free into a spouse’s IRA, allowing 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 The Ethel Walker School, it may be best to segregate the charitable portion into a separate IRA, naming yourself as the first beneficiary and The Ethel Walker School as the secondary contingent beneficiary. This makes it evident to your executor which portion goes to charity and which portion goes to family, thus clarifying the subsequent tax treatments. There may also be other income tax issues that affect IRAs with charitable beneficiaries. It is imperative to discuss this beneficiary designation with your tax advisor prior to execution of the charitable beneficiary designation.

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 (depending upon current market rates in the securities market), through quarterly payments for her lifetime. A charitable deduction is generated in the year the trust is 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 receive the charitable deduction in the year the trust is created, while the grandchild would receive the income payments. Gift tax may apply, and there are also potential income tax issues that come into play, 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. For more information, please contact Assistant Head for Advancement Gretchen Orschiedt at gorschiedt@ethelwalker.org or +1-860-408-4260.

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 The Ethel Walker School, too.

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 devise attractive.

If a donor has an unmortgaged, marketable property that she would like to donate to The Ethel Walker School, 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 wishes to donate a home or land 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 will 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 donor’s death, The Ethel Walker School will take full possession of the real estate and sell it. The donor will be asked to bear the cost of the appraisal and upkeep of the property (for example the real estate tax, insurance, utilities, repair and maintenance) while she resides in the residence.

Funding a Trust With Real Estate
If a donor 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 will 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.

Some donors have insurance policies and no longer need the policy to protect their loved ones. If that is the case, please consider donating your life insurance policy to The Ethel Walker School. There are a number of ways you can make a gift of life insurance to the School. For more information, contact Assistant Head for Advancement Gretchen Orschiedtat gorschiedt@ethelwalker.org or +1-860-408-4260

The Protecting Americans from Tax Hikes Act of 2015 includes a permanent extension of the IRA charitable rollover that is now a part of the U.S. tax code.

The IRA charitable rollover allows taxpayers age 70 ½ or older to make tax-free charitable gifts of up to $100,000 per year directly from their Individual Retirement Accounts to eligible charities, including independent schools. These qualified charitable distributions can fulfill an individual’s required minimum distribution. Gifts postmarked by December 31 will qualify as a qualified charitable distribution for that year. Please contact your IRA plan administrator for instructions on initiating a gift to Walker’s (Walker’s Tax ID: 06-0689699).