Estate Plan Targeting In 10 Steps

Gender and childlessness have always been among the leading indicators for charitable gifts in estate planning. New research has identified a top 10 list of lifetime characteristics that are most important in predicting charitable transfers.

“The Emerging Potential of Longitudinal Empirical Research in Estate Planning: Examples from Charitable Bequests” is based on the Health and Retirement Study (HRS), which includes nationally representative data that has come out biannually since 1992. The HRS tracked more than 14,000 people since age 50 to connect lifetime giving and other characteristics and planning and seeing where estates actually have been transferred.

The author of the paper is Russell James, a professor in the Department of Personal Financial Planning at Texas Tech University in Lubbock, Texas, where he runs the graduate program in charitable financial planning.

A statistical analysis of the top 10 lifetime characteristics most important in predicting who would make post-mortem charitable transfers using HRS data found those to be, in order of importance:

  • Consistency in donating, i.e., the share of all survey years in which the respondent indicating donating at least $500 to charity. Having no offspring;
  • The highest amount ever donated in any one year during life;
  • Consistency in reporting having a funded trust;
  • Being female;
  • Wealth in the final survey;
  • Not being married;
  • Donation amount in the year of the final survey;
  • Having a growing trajectory of wealth leading up to death; and,
  • Consistency in volunteering.

“Several of these most important predictive factors reflect behavior across many years,” according to James. For example, wealth trajectory approaching death — not just ending wealth — was critical along with consistency across all survey years in giving, donating, and reporting having a funded trust.

Similarly, the highest amount of donations ever reported in any one year was an important predictor, more so than the amount of donations reported in the final survey year prior to death. “By disclosing more of the lifetime history of decedent behaviors, the HRS reveals the importance of such comprehensive information in predicting post- mortem charitable estate transfers,” the paper’s author noted.