Working Paper Series
Estate Division: Equal Sharing as Choice, Social Norm, and Legal Requirement
() and Henry Ohlsson
Abstract: The objective of this essay is to study to what extent
parents divide their estates unequally between their children and the
determinants of this decision. We use a new dataset based on the estate
reports for almost 70,000 Swedish widows, widowers, divorcees and unmarried
individuals who died with positive estates and at least two children.
Unequal sharing is unusual; depending on definitions only 2–12 percent of
the estates are unequally divided. Previous studies for other countries,
particularly from the US, find that around 20–40 percent of parents divide
their estates unequally. We argue that the relatively low frequency of
unequal sharing in Sweden might be explained by contextual factors such as
the inheritance law, the transfer tax system, the income distribution, and
the welfare state. We also estimate models with family fixed effects to
study how the characteristics of children to parents who choose unequal
division affect the size of the transfer. The empirical estimates show that
bequests are not used to compensate for income differences between
children, suggesting that bequests are not guided by altruistic motives.
Children who are likely to have provided services to the parent receive
more than their siblings however. This suggests that, at least some
bequests are guided by exchange motives.
Keywords: Estate division; Wills; Equal sharing; Bequests motives; Iinheritances; (follow links to similar papers)
JEL-Codes: C81; D10; D31; D91; H24; (follow links to similar papers)
45 pages, February 18, 2014
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