I study bequest and wealth accumulation behavior of the wealthy (subject to the estate tax) shortly before death. The onset of a terminal illness leads to a very significant reduction in the value of estates reported on tax returns-fifteen to twenty percent with illness lasting "months to years" and about five to ten percent in the case of illness reported as lasting "days to weeks." I provide evidence suggesting that these findings cannot be explained by real shocks to net worth, such as medical expenses or lost income, but instead reflect "deathbed" estate planning. The results suggest that wealthy individuals actively care about disposition of their estates but that this preference is dominated by the desire to hold on to their wealth while alive. (c) 2007 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..
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