One of the simplest forms of planned giving is a bequest to Hawken School that passes directly from your will. You may give any asset you own, such as stock, real estate, tangible personal property or cash. In addition, the bequest can be phrased as a percentage or share of your gross estate.
Revocable Trusts (Living Trusts)
A revocable trust is a legal arrangement that transfers ownership of your assets from you, the grantor, to a third party, the trustee. The trustee manages the assets on behalf of your designated beneficiaries. A revocable trust is used to maintain control over your assets during your life and control the disposition of them after your death through the trustee. This trust helps to avoid probate costs, maintain privacy and ensure that your wishes are adhered to both during and after your lifetime.
Charitable Gift Annuities
A charitable gift annuity is similar to a charitable remainder annuity trust in that it allows you to transfer cash or other property to Hawken in exchange for a commitment by the School to pay you a specified amount each year. At your death, the remaining assets are distributed to the School. The minimum age for a charitable gift annuity is 60.
Deferred Charitable Gift Annuities
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 Hawken.
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.
Charitable Lead (Income Trusts)
A charitable lead trust is the opposite of a charitable remainder trust. In a charitable lead trust, you irrevocably transfer the property into a trust, with the income from the trust being paid to Hawken School for your life or for a specified term of years. Upon termination of the life or the term, the remainder interest (the principal of the trust) is either retained by you or passed to another non-charitable beneficiary (i.e., son, daughter, etc.).
There are various methods by which a life insurance policy may be contributed to Hawken School. You may:
Assign irrevocably a paid-up policy to Hawken as the owner and beneficiary;
Assign to Hawken School irrevocably a life insurance policy on which premiums remain to be paid; or
For a fully paid-up policy, name Hawken School 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.
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 Hawken School 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.
Property with Retained Life Estate
You may transfer to Hawken School 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 School, 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.
Hawken School (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 School.
There are some significant tax advantages to using stock to fund a deferred gift. When a gift of stock is made directly through transfer of ownership to Hawken School, no capital gains tax is owed. The School sells the stock and you receive a deduction equal to the full, fair market value of the stock.
The Sheffield Society
Since Hawken School’s inception in 1915, many alumni, parents and friends have taken the concept of introducing the next generation to “a higher plane of life” to heart by including the School in their estate plans.
Perhaps no one individual has made a more significant impact than Henry Sheffield, a prominent attorney/philanthropist who befriended founder James Hawken soon after the School was organized.
One of the earliest trustees of the School, Mr. Sheffield made numerous gifts over a span of nearly six decades. His first of many annual fund gifts to support operations was made in 1918; nearly sixty years later, upon his death, an estate gift was presented to the School.
Together, these generous gifts over his lifetime have a present value in excess of $10 million. We honor his philanthropic legacy by naming our planned giving society for him.
The Sheffield Society (previously known as the Hawken Heritage Society) recognizes individuals who have included Hawken School in their estate plans. Click here for more information.