Immense transfer of wealth on the horizon By Colin Anderson
The numbers in what’s being called the greatest wealth transfer in history are simply staggering. The Silent Generation and Baby Boomers have spent a lifetime accumulating retirement savings, assets, properties and other forms of wealth. According to research and analytic firm Cerulli Associates, nearly 45 million U.S. households will transfer a total of $68.4 trillion in wealth to heirs and charity over the course of the next 25 years. About $30 trillion of that could come in just the next 15 years.
It is truly a difficult number to comprehend, and this transfer will have far-reaching effects on just about every aspect of our daily lives. Here, in the more sparsely populated Inland Northwest, billions of dollars in assets will also be inherited over the next two decades. Some will decide to pass their wealth directly to Gen Z or Millennial children, while others are setting up college or savings funds for young—or even yet to be born—grandchildren. Others will give to their place of worship, alma mater, nonprofit, or other organizations that have touched their lives. Estate planning is a very personal decision, but when deciding where the assets you’ve accumulated will go, just about everyone wants to make sure it’s something that will make an impact most near and dear to their heart.
For more than 40 years, the Innovia Foundation has been encouraging generosity from the community in order to transform lives and communities so that every person has the opportunity to thrive. It was formed by three women who were inspired by the impact the World’s Fair had on greater Spokane and wanted to see that impact continue for future generations.
Today, Innovia works on civic engagement, building scholarships and learning opportunities, enriching communities through arts and culture, and keeping the quality of life so many in Eastern Washington and Northern Idaho enjoy. As the community foundation for Eastern Washington and North Idaho, Innovia partners with people who want to make our world better. Innovia works to address and solve our region’s problems, help those in need, identify and respond to our greatest opportunities, and leave a lasting impact. Last year, the Innovia Foundation invested over $10 million into our communities through grants and scholarships to nonprofit organizations and local students.
Another large focus of the organization is pairing community members willing to donate with organizations that align with their beliefs and passions. “Flexibility is the number one reason that donors want to work with us,” explained Chief Strategy Officer Aaron McMurray.
Though we are one region, the priorities of residents can vary greatly from those settled in small communities near the Canadian border to apartment dwellers in downtown Spokane. Innovia has created volunteer leadership council teams across the 20-county region that gathers the pulse of their designated region and what’s most important to its community members. As awareness of the greatest transfer of wealth became more apparent, a campaign idea was created by the Kootenai County Leadership Council, an endowment called the Kootenai Forever Fund.
“The Kootenai Forever Fund resonates with the needs people see in our community today, while being nimble enough to serve the needs 20 years from now and beyond,” Jan Tymesen, Leadership Council member, shared. “This flexibility secures that this ‘community chest’ will forever be available to meet the ever-changing needs of our county.”
When strategizing for this campaign, McMurray says they landed on a 5 percent of wealth ask as contribution to the fund. “When you think of end-of-life planning, you want your generosity to make the biggest impact. This does that while you are still able to donate to your church, university, and other charities you are passionate about,” he explained.
Innovia believes that the wonderful part about the fund (which new funds have been created in both Boundary and Bonner counties,) is the flexibility of it. By contributing 5 percent to the fund, the donor knows that money will go directly to their community and have an impact on what’s most needed, not just today, but in the future as well. “What is the issue five, 10, even 15 years from now?” asked North Idaho Regional Engagement Manager Amy Voeller. “Needs vary significantly, from food insecurity to affordable senior housing, as identified by those who live in these communities.”
The Kootenai County Leadership Council members launched this fund with a $5,000 matching gift challenge from Jan and Troy Tymesen. With generous gifts from Leadership Council members and members of the community, the Kootenai Forever Fund reached over $23,000 by the end of summer and continues to grow as word spreads. “Our fund benefits everything they’ve previously supported, and a group of local volunteers will always be here to gauge the most important needs of each of these communities,” said McMurray.
While the vast majority of us don’t have incredible wealth and assets in which to pass on, 5 percent of even smaller estates multiplied by many donations will quickly add up to a very large sum. This is another pitch from Innovia, that even if you don’t feel that you will leave a great sum of money, what you do contribute will stay directly in your community and, through an endowment, can grow to a much larger sum than your original donation.
Boomers and those coming up on retirement likely have an estate plan started, but that can easily be updated. Innovia is also looking to reach out to those in their 40s and early 50s to encourage them to begin planning for the future, even though it seems like a long way off. “It’s never too early to start doing end-of-life planning, especially if you want to make sure that something from your estate goes back into the community that you care most about,” said Voeller.
While Innovia does not employ estate planners, accountants, or other financial advisors, they do partner with well-established and reputable financial professionals throughout their entire service area and can recommend professionals based on a potential donor’s needs and priorities. It also is set up to take unique assets such as life insurance policies, shares, retirement accounts and properties. These donations can bring down potential capital gains and other tax savings while the gifts are invested and allowed to grow even further in value.
The Leadership Council encourages all those who are invested in ensuring the needs of their community are sustainably met to consider giving to this fund. “What will build this fund is the estate planning, but you can gift to the fund now as well with a one-time donation. We hope to inspire generosity from our community members, as the more we can obtain now the better off the fund will be in the future,” said Voeller.
If you would like to learn more about these various funds or would like to volunteer on a leadership council in your community, visit Innovia.org.