Giving with a warm hand: Evidence on estate planning and bequests
In this paper we study the bequest motive for saving, using administrative data on all deaths that occurred in the Netherlands between 2006 and 2013. In doing so, we build on the previous work by Kopczuk (2007). We study whether individuals start transferring part of their estate to their heirs in the expectation of death in the foreseeable future. First, we distinguish between sudden and non-sudden death. Second, controlling for gender, age, marital status, and permanent income, we find that non-sudden deaths are associated with less wealth at the time of death. We find the strongest effect, a difference in financial wealth of about 24%, for single individuals who die of cancer. Relying on the richness of our data and on the characteristics of the Dutch institutional context, we interpret this result as a reflection estate planning that is triggered by an underlying bequest motive.