Rachel A. Paxton was born 11 Feb 1826 in New York. Little is known about her early life. She was married to Charles Rupert Paxton (20 Mar 1816-1 Feb 1889), a wealthy industrialist in Pennsylvania. Paxton worked as a civil engineer on the Erie Railroad as a young man, and later bought land in Alleghany County NY which he farmed. From there he moved to Bloomsburg, PA where he amassed a considerable fortune starting Bloomsburg Iron Company and serving as its president. He was also president of Bloomsburg's First National Bank, a position he retained after he left the iron company and moved to Loudoun County, VA. In 1869 Paxton came to Leesburg to purchase land on which to build a summer house. He bought a 765-acre piece of land at auction from Abner Trundle (ca. 1833-unknown), paying $50,000.

Paxton hired New York City architect Henry C. Dudley (n.d.) to design the house. The 32-room house, called Carlheim, featured many decorative interior details such as silver hardware and elaborate plasterwork. The exterior reflects the influence of Second Empire and Italian Villa styles, and is considered an unusual example of Victorian architecture in northern VA. Additional structures on the property included a peacock house, barn and smokehouse made of sandstone. John Norris (ca. 1812), owner of Norris Lumberyard, undertook construction. Well-diggers were surprised to discover a large underground lake under the house after the structure had been built; it went dry sometime in the 1930's. In addition to the Carlheim property, Paxton also owned approximately 7,800 acres of farm land, most of it in the Broad Run area. He was regarded as a good landlord, taking much care with cultivation of the land and construction of buildings.

The Paxtons had one daughter, Margaret (ca. 1850-24 Jul 1900). She married Bolivar Christian (26 Apr 1825-17 Jul 1900), a lieutenant colonel in the Confederate Army and a lawyer in Greenville, VA, on 26 May 1875. They had one child, Charles Paxton Christian, born 8 May 1876. The child died of diphtheria 25 June 1881. Margaret and Bolivar separated, although it is not possible to ascertain when; census records for 1880 show her residing with her parents in Leesburg. Bolivar Christian died a patient in Western Virginia Hospital, to which he had been admitted several times from 1 Oct 1882 until his death. Margaret appears to have remarried. Her obituary in the Loudoun Mirror in 1900 identifies her as Mrs. Margaret Parker of Avon, NY. She was buried in Hornellsville, NY, though a stone bearing her name is also located in Union Cemetery with her parents and son.

After Charles Paxton died in 1899, Rachel Paxton continued to live at Carlheim. Towards the end of her life she devoted her time to the creation of the Margaret Paxton Memorial for Convalescent Children, a memorial to her daughter. The trust called for the house and 50 acres of land to be used to care for poor children, and established a $30,000.00 endowment to support it. A three-person board of trustees and advisory board of visitors was named and given an additional $5,000.00 to help institute the facility. Following Rachel Paxton's death on 30 Dec 1921, the process to shift Carlheim from residence to convalescent home began.

From 1924 to1954 the facility came to be called the Paxton Home for Children and was used during the summer months for children recovering from illness or injury. In 1954 it became an orphanage following a court battle over the interpretation of Paxton's will. Her heirs contended that the change violated Paxton's instructions; they were over-ruled by Circuit Court Judge R.V. Snead. It continued to function as an orphanage until 1980, when it became a child care center. Paxton House, as it is commonly known, operated in this capacity until 2004.