Friday, November 30, 2007
The Enquirer - Boomer wealth may leave area
The Enquirer - Boomer wealth may leave area: "Local baby boomers will soon leave billions to their kids, and a local foundation is worried those funds will follow a generation of young people out of Greater Cincinnati. As much as $169 billion is expected to shift from parents and grandparents in Hamilton, Adams, Brown, Butler, Clermont and Warren counties to younger relatives by 2055, according to a recent study on wealth transfer by the Rural Policy Research Institute's Center for Rural Entrepreneurship. That finding follows a national trend in which about $41 trillion is expected to change hands by 2052. That may be good news for a slacker kid waiting to get his hands on mommy's fortune, but not necessarily for this region, which is losing more 25-to-34-year-olds - a group that stands to inherit much of that cash - than it gains."
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Relationship management is the key to enabling the Greater Cincinnati Foundation and other charitable organizations to keep wealth in the community. Donors need to be more than just the annual feel good fundraising check. Learning the donor’s personal, family, and philanthropic intent opens the door to creating gifts that are winning propositions for the donor and the organization.
Properly structured, even a major gift can become today’s seed which can be harvested as tomorrow’s crop.
When crafted correctly, a Charitable Lead Annuity Trust (CLAT) coupled with an Irrevocable Life Insurance Trust (ILIT) to replace the principal can become a gift that keeps on giving. While the charitable organization receives income for a period of time, the remaining principal reverts to a named beneficiary such as family member. This provides a strong foundation upon which to build an intergenerational relationship and to generate opportunities for future gifts.
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