Planned Giving: The Bishop Niles Legacy Society » Planning Your Legacy Gift

Planning Your Legacy Gift

When you include The White Mountain School in your estate plans, you will know that you have made a lasting impact, ensuring that future generations will benefit from the exceptional education our School provides. Over the years, alumnae/i, parents, neighbors, and friends of the School have generously supported its mission in various ways through planned giving.

Planned legacy gifts can reduce tax burdens at important life junctures while also providing valuable financial resources for the School. Below are summaries of several planned giving options.

Generous supporters of White Mountain often wish to continue their support for the School's mission in perpetuity. A bequest is a simple and effective way to continue your contribution to the School beyond your lifetime. A bequest uses resources that are no longer needed for yourself to achieve your aspirations for the School, such as:

  • Underwriting critical needs.

  • Providing general endowment for future needs not yet imagined.

  • Endowing your annual gift in perpetuity.

Bequests are the most common planned gift with almost universal appeal. A bequest to the School may well suit your needs, if:

  • You have a will or revocable trust or are ready to create one.

  • You want to give while ensuring that your family is taken care of first.

  • You wish to keep your options open should you wish to change your mind.

  • You seek to lessen possible estate tax.

Your bequest to the School helps ensure that White Mountain will thrive—and its mission will flourish. A bequest gift is easy to make with an attorney's assistance and can be written to suit your exact inclination, whether that is to give the School:

  • A particular percentage of the estate’s value.

  • A specific dollar amount.

  • A particular item of property, such as real estate or stock.

All charitable giving tends to lessen the taxable estate, but a charitable lead trust can dramatically reduce estate taxes. Charitable lead trusts make a series of payments to charitable organizations like White Mountain. Those payments may bring tax benefits that make it possible to eventually transfer trust assets to family at greatly reduced estate tax.

A lead trust, step-by-step:

  • First, you fund the trust with a property that will pay dependable income over time.

  • Then, you direct the trust to make certain payments to the School (and other charities) for a period of years, a lifetime, or both.

  • During the trust's term, your lead trust uses income from trust assets to make these charitable payments. Meanwhile, the trustee you choose manages the trust property.

  • At the end of the trust term, the trust ends, charitable payments cease, and the trust assets are directed as you specified, generally to family members of any generation.

  • You receive a substantial gift tax or estate tax deduction on the final transfer to your family. Plus, any appreciation in the assets while in trust avoids transfer tax.

A Charitable Lead Trust Scenario

Mr. and Mrs. Lee own an apartment building worth $2,000,000, which yields a gross annual rental income of $150,000. The Lees, both age 72, want their two grown children to inherit the apartment building at the lowest possible estate tax cost. They put the building in a charitable lead trust for a 15-year period and direct the trustee to divide the trust's net income of around $135,000 (after expenses) equally between White Mountain and the Lees' college alma maters.

The Lees earn an estate tax deduction of between $1,300,000 and $1,750,000 (depending on IRS rules), reducing the tax liability on the transfer to their children to an amount well within the current estate tax credit. Plus, the Lees have the immense satisfaction of giving almost $1,000,000, over time, to the School (nearly $50,000 per year for the trust's estimated duration of 20 years) for a use they designated.

A Charitable Remainder Trust (CRT) can be a key part of your long-term plans to build a legacy for your family and White Mountain. A CRT:

  • Receives your cash, securities, or other property and sells and reinvests them (free of any capital gains tax) in professionally chosen securities.

  • Makes regular payments to yourself or your loved ones for a length of time set by you, and then terminates by giving all remaining trust assets to charities—such as the School—that you chose.

  • Will have a major impact on the School's future by providing substantial funds vital to meeting the needs of the White Mountain community.

A CRT pays income, either fixed or variable, to you or your loved ones:

  • Fixed: Your Charitable Remainder Annuity Trust pays a set dollar annuity each year, equal to a percentage (chosen by you, but at least 5%) of initial assets placed in the trust.

  • Variable: Your Charitable Remainder Unitrust pays at least 5% of the annual value of trust assets as valued annually. This income changes with the assets' value but is designed to increase over time (assuming a gradual rise in asset values), providing a hedge against inflation.

  • You can designate any person or persons who may be designated to receive trust payments.

A CRT is a great way to give and a flexible planning tool:

  • You can provide income to almost anyone, or several people at once: spouse, children, grandchildren, or others.

  • It can last for a lifetime of one or more persons, a set number of years, or both.

  • After it has been established, you can contribute additional assets to it, and change the charitable beneficiary or add additional ones.

A CRT brings benefits:

  • You avoid capital gains tax on securities put into trust, allowing you to unlock capital appreciation in land or securities.

  • You can enhance disposable income by converting low-yielding to higher-yielding assets.

  • You can reduce possible estate taxes.

  • You can diversify large asset holdings.

  • A CRT gives you the opportunity to create a legacy by supporting the School's mission and making a major impact on the School's future.

A necessary protection against the hazards of life, life insurance is a simple and practical way to give to White Mountain. Many people come to own life insurance policies at several points in their lives. Each one is an opportunity to support the School.

"Old" Insurance

Many people own paid-up life insurance policies purchased years ago to protect young children who have long since grown up and left home. Policies with a cash value often remain in force, even though they have outlived their usefulness.

Such a policy can help the School in one of two different ways. If given ownership of the policy, the School can redeem it for an amount close to its cash value, a very substantial gift to the School. Alternatively, if the School is made the beneficiary, then it will one day receive the policy's death benefit, assuming any required premiums are paid.

Workplace Term Life Insurance

Many workers enjoy a term life benefit through their workplace. Making White Mountain a partial beneficiary of such a policy begins a process of planning a legacy for the School that reflects what the School means to you. While such policies usually lapse at the end of your time with that employer, such a designation begins a habit of mindfulness that is likely to result in your leaving an enduring legacy to the School.

Making the School a beneficiary of any type of life insurance policy is a big step in giving back. Making the School owner of a cash value policy constitutes an outright gift to the School and generally entitles the donor to a charitable deduction.

Qualified Retirement Plans—401(k) and 403(b) plans, IRAs, Keoghs, and others—will be many people's primary income source after retirement. Contributions to these plans are often tax-free and usually grow tax-free as well, making these plans many peoples' largest single asset by the time they retire. Indeed, the accounts comprise around one-fourth of the assets of professionals as a group.

Yet, assets in retirement accounts are heavily taxed at the death of the owner. Unlike almost any other asset, these plans must usually pay income tax, plus possible estate tax. These combined taxes can easily approach 70%. Thus, retirement plans are less valuable in the hands of heirs than they are in the hands of tax-exempt organizations like White Mountain. The income and estate taxes that are saved will actually pay for most of the gift.

One Scenario

Mrs. Jefferson dies owning a 401(k) plan inherited from her husband. Plan assets total $600,000. An alumna, she nevertheless leaves the retirement plan to her children while leaving the School a gift of appreciated stock, also worth $600,000.

Because of her estate's size, the plan is subject to estate tax at the 40% rate. Add the income tax, and her retirement plan could undergo taxation of up to 70%, as follows:

$600,000 Total retirement account balance
-$180,000 Income tax at 30%


-$168,000 Estate tax at 40% rate


$252,000 Remaining in retirement account after combined taxation

In this scenario, less than half of Mrs. Jefferson's retirement plan ends up where she wanted it to go—to her children.

A Better Result for Everyone

Instead of leaving the 401(k) plan to her children, Mrs. Jefferson's estate plan designates that the retirement plan balance for the School and the appreciated stock passes to her children. The retirement plan escapes both income and estate taxation since 100% of its value is a charitable contribution. This arrangement also benefits her children, who inherit the $600,000 stock portfolio on these favorable terms:

  • Free of taxation on any capital gain in the stock at their mother's death since the basis in the stock is "stepped up" to its fair market value as of her death.

  • Protected from any federal estate tax by the currently applicable estate tax credit.

In addition to these types of planned gifts, individuals may receive benefits from gifts made from retirement accounts, real estate, and appreciated property. Family foundations and donor-advised funds also may provide benefits to donors interested in maximizing impact to the School and/or managing tax burdens.

In addition to these types of planned gifts, individuals may receive benefits from gifts made from retirement accounts, real estate, and appreciated property. Family foundations and donor-advised funds (DAFs) also may provide benefits to donors interested in maximizing impact to the School and/or managing tax burdens.

For more information or to confidentially discuss your ideas, please contact Scott Hunt at [email protected] or 603.444.2928 x249.

Disclaimer: Any information concerning giving options or their tax benefits on this web page, website, or elsewhere provided by The White Mountain School is of a general educational nature only and does not constitute, or substitute for, legal or financial advice. Please seek competent legal or financial advice regarding how any gift to the School might affect your personal situation(s).

© 2022, The White Mountain School.