Legacy Giving

Bequests to Carroll may be made in several ways, including:

• a specific bequest of a dollar amount which is exempt from estate taxes
• a residuary bequest of all or a portion of a donor’s estate after the payment of specific amounts to other beneficiaries
• a testamentary trust, the principal of which is paid to the School upon the death of beneficiaries of the trust income

Carroll School may be designated as the sole beneficiary of a life insurance policy, with the donor retaining the right to change the beneficiary at any time. Donors also might consider assigning their present paid up life insurance policy to Carroll.

There are two types of Charitable Remainder Trusts – a Charitable Remainder Annuity Trust and a Charitable Remainder Unitrust. Both are separately managed and provide income first to you or your named beneficiary and then, upon your death, to a charitable organization such as Carroll. An Annuity Trust provides a fixed annual income while the Unitrust provides a fixed percentage (not less than 5%) of the fair market value of the Trust’s assets to be received annually as income. In this case, the percentage received each year does not vary, but the actual income may vary depending on the fair market value of the trust’s assets. The donor is entitled to a charitable deduction at the time the trust is created; no capital gains tax is imposed on the donation of appreciated securities and the gift reduces the size of the taxable estate.

This type of trust is an arrangement in which the donor transfers assets to an independent trustee for a selected number of years. During this time, Carroll would receive the income from the trust. Upon termination of the trust, the principal reverts to the donor or named beneficiaries such as children or other loved ones. If the assets are to be returned to you, you receive an income tax deduction when the trust is created. If the assets are passed on to heirs, applicable estate or gift taxes on the value of the gift are reduced or completely eliminated. Trusts may be funded with cash, securities or other assets.

Naming Carroll as a beneficiary of your retirement account can be a way to avoid significant estate taxes. Qualified Retirement Plans may be the most tax-burdened assets you own. If you die before you have taken all of your distributions from qualified plans such as an IRA or 401(k), the balance remaining in your plan can be subject to multiple taxes.