Wills, Wealth, and Race

Jean-Pierre Aubry, Alicia H. Munnell and Gal Wettstein

Issues in Brief from Center for Retirement Research

Abstract: Inheritances make up a substantial share of national wealth, but are often overlooked in discussions of retirement security. Racial gaps in inheritances are likely to exacerbate racial disparities in wealth. One reason that Black and Hispanic decedents are less likely to pass down meaningful estates is that they are far less likely to have a will than Whites. This brief, which is based on a recent paper, uses the Health and Retirement Study (HRS) to document how the likelihood of receiving an inheritance, the plan to leave a bequest, having a will, and actual bequests vary by race and how the four are interrelated. That is, to what extent does receiving an inheritance increase the likelihood of planning to leave a bequest and having a will, and to what extent does having a will relate to the realization of bequest expectations? Specifically, the analysis uses the HRS exit interviews of proxy informants for HRS participants who have died to explore whether the existence of a will affects the extent to which bequest intentions are actually realized. The discussion proceeds as follows. The first section discusses why wills are important. The second describes the data and methods of the analysis. The third section summarizes the factors affecting the likelihood of receiving an inheritance, the plan to leave a bequest of at least $10,000, $100,000, and $500,000, and the presence of a will. The fourth section turns to the results that relate bequest expectations to realized bequests to see whether expectations are a good predictor of real outcomes and how that relationship is affected by the presence of a will and the race of the individual. The final section concludes that race is strongly correlated with the likelihood of having received an inheritance, of having a will, and of leaving a bequest, while wills are positively related to the likelihood that bequest expectations become reality.

Pages: 7 pages
Date: 2023-08
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