Intergenerational Transfer of Wealth in Montana

Rae Lynn Hays, project director

Objectives

• Review of RCDI Program • What is the Intergenerational

Transfer of Wealth and how does it impact our rural communities

• Implementation Strategies

RCDI Program Objectives

• $150,000 – 3-year grant from USDA, matched by MSU Extension and Montana Community Foundation

• Train the Trainer Program for 20 Extension Agents

• Delivery methods: statewide events, webinars, regional meetings

• Training LCF with $1,000 incentive

RCDI Outcomes

• Increase endowments– Capture Transfer of Wealth opportunities– Secure assets to sustain local communities

• Develop leadership skills • Increase rural engagement

– Prioritize community needs• Strengthen Relationships

State of Giving

• 83% of American give to charity while they are alive

• Only 4-6% give to charity through a bequest (when they no longer need it)

Transfer of Wealth

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Process

• One generation transfers assets to the next generation

• Typically ocurs at time of death

• Potenial of legacy giving is the greatest

• Larges under-deveoped financial resource available to communities

Montana’s Transfer of Wealth Opportunity

Population Trends• Largest ingenerational transfer of wealth is occuring right now• Babyboomers• Heirs in Montana

Assets in Montana• Historic wealth• Agricultural land• Real estate

TOW Trends• Varying across the nation/state• Capture or escape route

Transfer of Wealth

Montana Population

Montana Regional Populations

Feeding the Population

Montana TOW

County Comparisons

Intergenerational Transfer of Wealth

• Largest transfer occuring now• $12 billion over 10 years

– 5 percent = $619 million in endowments– 5 percent = $31 million in annual grants

• Goal – keep assets in Montana• 2011 TOW study

– Msucommunitydevelopment/rcdi.org– Mtcf.org

TOW Example

HILL COUNTY:10-year TOW=

5%=Annual grant making=

Transfer of Wealth Video

• DVD• You Tube

TOW Event Ideas

• Press Releases• Planned Gifts

– Annuities, charitable trusts, estate gifts (will, retained life estate)

• Gifts of grain or livestock

Montana Endowment Tax Credit• Donors pay less in state income

taxes• 40% of gift’s federal charitable

deduction, up to $10,000/yr/individual

• 20% of direct gift by a qualified business up to $10,000 per year

Next Steps