Estate & Gift Planning
Since James W. Ellsworth’s bequest of over $4 million in 1926, more than 250 members of the Western Reserve Academy community have made irrevocable gifts totaling $10,000,000 to provide the strategic funding for endowment expansion and capital projects that has been so critical for the growth and prosperity of the Academy. By doing so, those who plan their estates have demonstrated their belief that the Academy has earned the right to be stewards of their legacies. This strong financial underpinning has helped to make WRA one of the preeminent boarding schools in the country.
We are here to help you explore the methods and advantages of planned giving, which can provide you with a lifetime income, help you avoid capital gains tax, or reduce your estate tax as you provide significant support for your alma mater. Planned Gifts have become an increasingly popular method of giving as they offer attractive incentives while allowing you to control the outcome of your estate.
We are excited to share with you WRA's planned giving newsletter, LEGACY. LEGACY is intended to be helpful and informative, while also recognizing our generous alumni and friends in the Reserve Heritage Society who have included WRA in their estate plans. Here is the latest volume of LEGACY.
For more information, contact Assistant Head of School for Advancement, Mark LaFontaine at 330-650-9704 or firstname.lastname@example.org.
RESERVE HERITAGE SOCIETY
Consider establishing your legacy at Western Reserve Academy as a member of the Reserve Heritage Society (RHS), which recognizes those who shape WRA’s future by including the school in their estate plans. We thank all members, including those who prefer to remain anonymous, for their generosity, kindness and support.
Friends & Family
Retirement assets can be subject to multiple levels of taxation. Because money invested in these plans is not subject to income tax when invested, income tax is due when the money is withdrawn. The combination of federal income and estate taxes can seriously erode the value of retirement savings, in certain cases, up to as much as 80 percent of the value of the plan.
Careful planning for the disposition of retirement plan assets can help you avoid these undesirable tax costs. In certain situations, gifts to the Academy of retirement account balances can improve your overall tax consequences, as you increase the amounts passing to heirs and reduce income and estate taxes. Donating retirement plan assets could be the most cost-effective gift you can make.
Planned giving is an excellent way for donors to make a charitable gift to the Academy while realizing significant tax savings. Often donors are able to structure planned gifts to generate life income from assets that aren't income-producing. Below is information about the many vehicles for planned gifts. Please contact Mark LaFontaine, Assistant Head of School for Advancement at 330-650-9704 or by e-mail at email@example.com, if you have questions or would like more information.
A bequest is easily accomplished by naming WRA in your will or trust, designating a specific amount, percentage, or a share of the residue of your estate. A bequest is exempt from federal estate taxes. We can provide sample language that can be used in your will or trust. We hope alumni will consider “endowing” their annual gift through a bequest. For instance, a bequest to the WRA endowment will yield about 5 percent in usable income each year, so a $10,000 bequest would provide $500 toward the school’s operating budget on an increasing basis year after year.
Charitable Gift Annuity
A charitable gift annuity is similar to a charitable remainder annuity trust in that it allows you to transfer cash or other property to Western Reserve Academy in exchange for a commitment by the Academy to pay you a specified amount each year. At your death, the remaining assets are distributed to the Academy. The minimum age for a charitable gift annuity is 60.
Deferred Gift Annuity
A deferred charitable gift annuity is similar to an immediate charitable gift annuity, with the exception that annuity payments are deferred to some future date of your own selection. These payments will continue for the rest of your life and/or the life of your spouse or another individual. The minimum age for a deferred gift annuity is age 45, and payments are generally deferred until you reach age 60.
Charitable Remainder Trusts
Charitable remainder trusts provide for the payment of periodic income to a beneficiary for the beneficiary's life or specified term of years. Upon the death of the beneficiary, or the expiration of the specified term of years, the principal of the trust (remainder interest) is distributed to
Western Reserve Academy. There are two types of charitable remainder trusts:
I. Charitable Remainder Annuity Trusts
A charitable remainder annuity trust pays a fixed income to a beneficiary, which must be at least five percent of the fair market value of the assets initially contributed to the trust. This amount does not change, and no additional gifts may be made to the annuity trust after its creation.
II. Charitable Remainder Unitrusts
A charitable remainder unitrust pays a fixed percentage (at least five percent) to the beneficiary of the fair market value of trust assets as valued annually. Because the value of assets can be expected to change from year to year, the unitrust payment will vary in amount each year. Additional contributions may be made to the trust after it is established.
There are various methods by which a life insurance policy may be contributed to the Academy. You may:
- Assign irrevocably a paid-up policy to the Academy as the owner and beneficiary;
- Assign to the Academy irrevocably a life insurance policy on which premiums remain to be paid; or
- For a fully paid-up policy, name the Academy as owner and primary beneficiary of the policy.
New tax laws will exempt more estates from taxation over time. If you own life insurance policies that have built-up cash value but may no longer be needed for the payment of taxes or for their original purposes, such policies can also make convenient tax-deductible charitable gifts.
Property with Retained Life Estate
You may transfer to the Academy the title to a personal residence or other qualified real estate, while you, or another person, retain use of the property for a term of years or the life of the donor and/or another person. You continue to be responsible for real estate taxes, insurance, utilities and maintenance after transferring title to the property unless the Academy, upon prior approval of the development committee, agrees to assume responsibility for any of these items.
Property without Retained Life Estate
Gifts of real estate may be made in various ways: outright, charitable remainder trust or annuity trust, and bargain sale. These guidelines pertain to gifts of real estate in general:
- You secure a qualified appraisal of the property.
- The Academy (or trustee in case of a charitable remainder trust) shall determine if the donor has clear title to the property.
- All gifts are reviewed and accepted relative to the policies agreed upon by the Academy.