Housing Wealth, Bequests, and the Elderly

There has been little consensus on why individuals do not spend down their wealth by death.
Competing theories debate whether assets are bequeathed intentionally or are unplanned.
Combining data on expectations of future bequests in the Health and Retirement Study with
changes in housing wealth during the housing boom, we aim to estimate whether a plausibly
exogenous wealth shock changes expected bequests. We find such wealth shocks lead to an
increase in the expected likelihood of leaving a large bequest. However, we do not find
complete pass through of the wealth increase, and find larger responses for individuals with
lower baseline wealth, health and risk aversion. Combined with evidence of other responses, the
results suggest roles for both planned and pre-cautionary savings bequest motivations.