Most seniors die with very little in assets

Andrea Combes has the story, riffing off an NBER paper by Jim Poterba and others that is based on a national database of older Americans (HRS). A few years back, Edward Norton and I completed a detailed study in which we linked probate files on how elderly persons divided their estate with information about their interaction with family to investigate whether adult children who provided more informal care got more in inheritance (most divide equally, no matter what). The top line finding of the Poterba study that most elderly persons do not die with large estates is confirmed in our detailed look. Here is a bit more.

This table shows the size (in dollars) of estates upon death stratified by whether their estate was divided equally or unequally. Overall, around 1 in 10 seniors in our sample that focused on central North Carolina had more debts than assets at death (negative estate), and the median estate value was under $20,000, with 1 estate being large enough (out of over 200) to owe inheritance taxes. This jibes with my other past work showing there are far more seniors who are spent down to Medicaid in the community (before Nursing Home admission) than those who might potentially be able to benefit from estate planning designed to bring about Medicaid eligibility.

Edward C. Norton and Donald H. Taylor, Jr. Equal Division of Estates and the Exchange Motive. Journal of Aging and Social Policy 2005; 17(1):63-82.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

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