Bequest and Tax Planning: Evidence From Estate Tax Returns / Wojciech Kopczuk.

Format:

Book

Author/Creator:

Kopczuk, Wojciech.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12701.

NBER working paper series no. w12701

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Bequest and Tax Planning

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

I study bequest and wealth accumulation behavior of the wealthy (subject to the estate tax) shortly before death. The onset of a terminal illness leads to a very significant reduction in the value of estates reported on tax returns - 15 to 20% with illness lasting "months to years" and about 5 to 10% in case of illness reported as lasting "days to weeks". I provide evidence suggesting that these findings cannot be explained by real shocks to net worth such as due to medical expenses or lost income, but instead reflect "deathbed" estate planning. The results suggest that wealthy individuals actively care about disposition of their estates, but that this preference is dominated by the desire to hold on to their wealth while alive.

Notes:

Print version record

November 2006.