The Transfer of Wealth

The Kansas Health Foundation and the Kansas Association of Community Foundations recently commissioned Wichita State University to do a study on the transfer of wealth in Kansas.  According to the statistics, Kansas families have accumulated incredible assets over the years.  It is projected that $600 billion in Kansas assets will be transferred in the next 50 years.

Up until now most of these assets stayed in the county where they were generated.  But now the adult children of rural families do not have a local job market to access so they move to urban areas and the transfer of assets leave the rural community to go with the heirs in urban communities.  It is true, the rural wealth leaves, never to return.  However, the future can be brighter if we make a few adjustments to the Transfer of Wealth (TOW) concept.

The TOW statistics for the service area of Pratt Regional Medical Center tell us the net worth for this service area was around $6.8 billion in 2004.  Between 2011 and 2020 there will be a transfer of $619 million of that local wealth.  The TOW increases approximately 10% for each subsequent 10 year time period until it reaches a total of $1 billion by 2060 in our area. 

What if we could capture just 10% of $620 million by 2020 for important non-profit organizations?  We would have $62 million to put to work in our rural communities without destroying the inheritances of our children.  If we needed to re-build or fund a major renovation at PRMC, we could do it without using tax dollars.  What a relief and what a plan!

But this does not happen without the help of the community.  This plan only works when a majority of the population has established a will or estate plan which leaves 10% of its assets to non-profits like PRMC.  Right now less than 15% of the 40 year-old and older crowd have a will or estate plan which contains a bequest to charity.  Using those figures we are down to $6.2 million for non-profit entities.  If we can improve on that number then we really have something.

The large charities in a community need a significant amount of money to stay healthy especially if they need up-to-date medical facilities or large plants.  This provides a way to do that without paying high taxes in the future or obligating our children to pay for them with their taxes.  It is something we should consider.

. . . equipping PRMC to be “Simply the Best”

IRA Charitable IRA Rollover Opportunity

On October 3rd President Bush signed legislation which includes an extension of the IRA Charitable Rollover program. The extension is retroactive, applying to distributions made throughout both the 2008 and 2009 tax years. The extension will allow individuals 70½ and older to donate, through a direct transfer, up to $100,000 from their IRA’s to the Pratt Health Foundation tax free. But act fast; as the process takes several weeks to complete – this is not a last minute strategy.

Festival of Lights Program

The 2008 Festival of Lights (FOL) program continues to provide an opportunity for people to make a year-end gift to help purchase medical equipment for PRMC. It also gives families an opportunity to recognize special people in their lives with either a memorial or honorarium gift.

The Gifts and Bequests program provides funds for the purchase of medical equipment at PRMC. The program was developed from a committee by the same name that raised and allocated over $1 million dollars for the hospital over the last 32 years. The Foundation is grateful for their work in helping equip PRMC.

Stop by and see the Festival of Lights Christmas tree and the displays of memorial and honorarium names in the PRMC Complex’s Riney Atrium. They can also be found at www.prmc.org under Pratt Health Foundation / Festival of Lights. It is a wonderful tree and a heartwarming experience to see the names of all those we remember at this time of year.

A publication of the Pratt Health Foundation (PHF)
203 S. Main * Pratt, Kansas 67124
( PHF and PRMC are 501(c)3 charitable healthcare organizations.)