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Wealth, gifts and estate planning at the end of life
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We quantify the size and tax-responsiveness of financial transfers made to heirs before death. The wealth of singles (including widows) with children declines substantially in anticipation of death. 92% of this decline is explained by transfers to children, while long-term care copayments can explain the remainder. Tax-reducing transfers are made across the wealth distribution and are very responsive to the tax rate. Using bunching and difference-in-bunching estimation and exploiting a reform to gift taxation, we estimate Frisch elasticities of gifts to the net-of-tax rate between 9, for those giving around €27,000, and 1, for those giving around €125,000.
Authors

Senior Research Economist
David’s research covers household wealth, intergenerational transfers, social mobility, pensions taxation, and health and work at older ages.

Stefan Groot

Jan Möhlmann
Working Paper details
- DOI
- 10.1920/wp.ifs.2022.2922
- Publisher
- Institute for Fiscal Studies
Suggested citation
S, Groot and J, Möhlmann and D, Sturrock. (2022). Wealth, gifts and estate planning at the end of life. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/wealth-gifts-and-estate-planning-end-life (accessed: 17 February 2025).
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