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$4 billion in wealth projected to transfer in Tama County

December 11, 2012
By Emma Lundgren - Americorps Volunteer - Community Foundation of Northeast Iowa , Toledo Chronicle, Tama News-Herald

Editor's Note: The Tama County Community Foundation is charged with distribution of revenue received by counties without a state-licensed casino in the state. The Foundation has a goal of expanding its reserves to provide a trust which can benefit worthwhile projects county-wide in the years to come. To meet state guidelines, the Tama County Foundation is an affiliate of the Community Foundation of Northeast Iowa.

An unpecedented transfer of wealth from the World War II generation to the baby boomers and then from the baby boomers to the next generation is being predicted based on research conducted by Community Vitality Center at Iowa State University. An estimated $4.4 billion is expected to change hands through probate estates within the next 50 years in Tama County alone. From 2010-2019, the projected transfer of wealth in Tama County is expected to surpass $695 million. In the state of Iowa, the transfer of assets is expected to peak from 2040 to 2049.

With most estates in the U.S., the vast majority of assets go to heirs. For generations, people lived their entire lives close to their birthplace and as wealth passed from one generation to the next, most stayed in the same county. This is no longer true, and once the wealth leaves our communities, it may never return. The Tama County Community Foundation, an affiliate of the Community Foundation of Northeast Iowa, urges residents to consider designating a portion of their estates, 401(k) and IRA accounts or life insurance policies to the Tama County Community Foundation, an endowment that will ensure Tama County residents enjoy the long-term benefits of this one-time opportunity.

With the Community Foundation's structure, charitable endowments are carefully invested to last forever and grow over time. The principal is never spent. A portion of the earnings from the fund is paid out in grants to address the most pressing community needs. Each year, an endowment of this size could generate millions of dollars for community projects and priorities?forever.

According to the 2010 U.S. census, Tama County's population was about 17,767 people. The Tama County Community Foundation hopes to secure a small percentage of the total county transfer of wealth. From 1998-2002 alone, the annual average of wealth transferred per recorded probate estate in the county was $315,802. The Tama County Community Foundation is encouraging every resident to feel the power of giving together. If just 1 percent of the wealth transferred was put into endowed funds, over $95 million could be awarded in grants to county organizations by 2049.

"If the community is behind this, generous donors could build funds that would invest millions of dollars over the next 50 years," said Rick Krug, Chair of the Tama County Community Foundation. "Think about what an endowment of this size could do for our county community. Within a decade, it could mean improved health and human services, new arts and cultural endeavors, increased recreational attractions and entrepreneurial investment?resulting in a better quality of life for everyone."

Additional details on size and timing of the wealth transfer are available in the full report at www.cvcia.org.

"Retirement accounts and insurance policies are excellent vehicles for planned giving," Krug said. "Both can be designated to charity without modifying an existing estate plan." IRAs and 401(k)s may be the best asset to earmark for estate giving since they can be highly taxed when given to heirs, losing up to 70 percent of their value in some cases.

The Tama County Community Foundation is a local nonprofit organization providing donors a simple, powerful and highly personal approach to giving?so their gifts do good works within the community, forever. For more information about the Tama County Community Foundation and how you can contribute, visit the fund website at www.tamaccf.org or contact the administrative office at 319-287-9106.

 
 

 

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