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Giving with a warm hand: evidence on estate planning and inter-vivos transfers

Author

Listed:
  • Eduard Suari-Andreu
  • Rob J M Alessie
  • Viola Angelini
  • Raun van Ooijen

Abstract

In this study, we examine the importance of estate planning and inter-vivos transfers towards the end of life. To that end, we use administrative data on all deaths taking place in the Netherlands between 2006 and 2013. We link these to wealth and income tax records and the hospital discharge register. Employing these unique data, we distinguish between sudden and non-sudden deaths and study how they compare in terms of wealth at death. Our results show that non-sudden deaths are associated with significantly less financial wealth at the time of death. We interpret this difference as the result of inter-vivos transfers that result from estate planning towards the end of life. We find significant effects not only at the top of the wealth distribution but along the entire upper half of the distribution. Diseases with a relatively low survival rate that do not affect cognitive abilities appear as the most likely to trigger estate planning. These results have important implication for gift and inheritance tax schedules that allow for tax avoidance via exemptions and the progressivity of the tax rate.

Suggested Citation

  • Eduard Suari-Andreu & Rob J M Alessie & Viola Angelini & Raun van Ooijen, 2024. "Giving with a warm hand: evidence on estate planning and inter-vivos transfers," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 39(119), pages 655-700.
    • Handle: RePEc:oup:ecpoli:v:39:y:2024:i:119:p:655-700.
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    File URL: http://hdl.handle.net/10.1093/epolic/eiae023
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    More about this item

    Keywords

    Saving; Inter-vivos Transfers; Estate Planning; Sudden Deaths;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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