Move your mouse to the top right of the event in question on the timeline until the cursor changes to a quarter-circle with a horizontal double arrow - there's a blue triangle which you should be aiming for. The tool tip "Fade offset" + 0 time value will also appear.
Hold the left mouse button down and drag to the left. This will create a fade-out. The "Fade offset" tooltip will indicate the amount of time you're using for the fade-out.