Testing for a Bequest Motive Using Cross-State Variation in Bequest Taxes: Technical Paper 2003-01

There are two broad categories of explanations for why people leave bequests. Bequests may be intentional, for a variety of reasons including altruism, “joy of giving,” or strategic considerations. Or they may simply be accidental, because people hold wealth for various reasons and life spans are uncertain. This paper attempts to determine whether bequests are intentional or accidental by looking at the effect of state bequest taxes (estate or inheritance taxes) on the giving of gifts while people are alive. If bequests are accidental, bequest taxes should have no effect on gift-giving; they