You can fade a character in/out using the material tab on the timeline.Select your character, Open the timeline, select the Material tab and at the point where you want to start fading out the character select the add key function on the top of the timeline, this will add a dot on your timeline in the material tab. Move further down the timeline to the point where you want your character to dissapear then do the following all at the same point.
You will need to slide the opacity slider in the modify panel from 100 to 0 on all of the following.
1 Character Upper
2 Character Lower
3 Character Shoes
4 Character Skin Shoes, Face, Hands,Lower, Upper (click the 'affect all materials' )
5 Hair
at this point you will also need to click the avatar visible button to off to make the eyes and mouth to dissapear.
Hope this makes sense