1. The document analyzes new data from a large longitudinal study that matched individuals' lifetime survey responses about charitable planning with their actual estate distributions after death. 2. It finds that most charitable bequests are added close to death, and charitable plans often change as death approaches or with life changes like health declines or family changes. 3. The data has important implications for charitable gift planners, suggesting they maintain contact with older donors and not assume charitable plans are permanent.

1. The demographics
of charitable estate
planning
Russell
James
Professor
Texas Tech
University

2. It’s kind
of a
BIG
DEAL
Why this new data is
so important

3. The entire “lifetime” movie
(tracking same people from mid-life to post-mortem)
New data
Previous data
Old
data
Small one-time
snapshots in life
Post-mortem for
largest estates

4. The entire “lifetime” movie
• Matches sequence of lifetime responses with post-
mortem distributions for over 10,000 decedents
• Identifies timing of plan changes
• Large, federally-funded, longitudinal, in-person,
well-compensated, nationally representative, study
on health and retirement issues

5. Warning!
This
might
not be
pretty

7. 52%
54%
56%
58%
60%
62%
1998
(n=18,987)
2000
(n=18,142)
2002
(n=17,353)
2004
(n=17,464)
2006
(n=17,033)
2008
(n=16,464)
2010
(n=18,370)
2012
(projected)
U.S. population aged 55+
with a will or trust

8. States allowing “Transfer on Death”
deeds in 1995

9. States allowing “Transfer on Death”
deeds in 2000

10. States allowing “Transfer on Death”
deeds in 2005

11. States allowing “Transfer on Death”
deeds today
(+2013 legislative action in 6 more states)

12. 5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
1998
(n=18,987)
2000
(n=18,142)
2002
(n=17,353)
2004
(n=17,464)
2006
(n=17,033)
2008
(n=16,464)
2010
(n=18,370)
2012
(projected)
U.S. population aged 55+
with will only or trust
Will Only
Funded Trust

13. 8.0%
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
1998
(n=18,987)
2000
(n=18,142)
2002
(n=17,353)
2004
(n=17,464)
2006
(n=17,033)
2008
(n=16,464)
2010
(n=18,370)
2012
(projected)
Charitable estate beneficiary among U.S.
population aged 55+ with a will or trust

14. 0%
1%
2%
3%
4%
5%
6%
7%
1998
(n=18,987)
2000
(n=18,142)
2002
(n=17,353)
2004
(n=17,464)
2006
(n=17,033)
2008
(n=16,464)
2010
(n=18,370)
2012
(projected)
U.S. population aged 55+ with a charitable
estate beneficiary in will or trust

15. Where’s the boom?

16. 0
20
40
60
80
100
120
140
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
$BillionsAnnually
Est. High ('98-'17)
Est. Middle ('98-'17)
Est. Low ('98-'17)
Charitable bequests
received
Charitable
bequests:
Predicted
v.
Received
Estimated annually is 1/20 of 20 year estimated total
from P.G. Schervish and J. J. Havens (1999) “Millionaires
and the millenium: New estimates of the forthcoming
wealth transfer and the prospects for a golden age of
philanthropy”. Bequests received are inflation-adjusted
numbers from Giving USA 2013

17. 0
20
40
60
80
100
120
140
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
$BillionsAnnually
Est. High ('98-'17)
Est. Middle ('98-'17)
Est. Low ('98-'17)
Charitable bequests
received
Estimated annually is 1/20 of 20 year estimated total
from P.G. Schervish and J. J. Havens (1999) “Millionaires
and the millenium: New estimates of the forthcoming
wealth transfer and the prospects for a golden age of
philanthropy”. Bequests received are inflation-adjusted
numbers from Giving USA 2013
Charitable
bequests:
Predicted
v.
Received

18. Charitable bequests since 2000
have trended flat…
What’s
going on?

19. 76
78
80
82
84
86
88
MedianAgeatDeath
Linear (Male Bequest Donor)
Linear (Female Bequest
Donor)
Linear (All Female)
Linear (All Male)
Wealthy people die old.
Wealthy bequest donors die even older.

20. 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95+
Cumulative percentage of charitable
bequest dollars by donor age at death
Over 80% of charitable bequest
dollars come from decedents aged 80+

21. 2000000
2500000
3000000
3500000
4000000
4500000 1913(Age101)
1917(Age97)
1921(Age93)
1925(Age89)
1929(Age85)
1933(Age81)
1937(Age77)
1941(Age73)
1945(Age69)
1949(Age65)
1953(Age61)
1957(Age57)
1961(Age53)
1965(Age49)
1969(Age45)
1973(Age41)
1977(Age37)
1981(Age33)
The “baby bust” is driving demographics
Births

22. Key population not growing, YET
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
50-54 55-59 60-64 65-69 70-74 75-79 80-84 85-89 90-94 95-99 100+
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Total resident population by 5-year age groups
Temporary flat
trend in key
population

23. Coming demographic wave will
impact CRT creation first, then CGA
creation, then bequests realization
Realized
Bequest Peak
Age: 88
Franey, J. W. & James, R. N., III (2013) Trending Forward: Emerging Demographics Driving Planned Giving. National Conference on Philanthropic
Planning, Minneapolis, MN, October 15-17, 2013
CRT Creation
Peak Age:
70-74
CGA Creation
Peak Age:
75-79

24. The future
is bright…

25. 5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ charitable estate
recipient among those with will/trust by
family status
Grandchildren
Children only
No Offspring (unmarried)
No Offspring (married)

26. 9%
11%
13%
15%
17%
19%
21% 1976(77-82)
1977(76-81)
1979(74-79)
1980(73-78)
1981(72-77)
1982(71-76)
1983(70-75)
1984(69-74)
1985(68-73)
1986(67-72)
1987(66-71)
1988(65-70)
1990(63-68)
1992(61-66)
1994(59-64)
1995(57-62)
1998(55-60)
2000(53-58)
2002(51-56)
2004(49-54)
2006(47-52)
2008(45-50)
2010(43-48)
Year (current age range)
Percent childless women age 40-44 in U.S.

27. 0%
2%
4%
6%
8%
10%
12%
14%
16%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ inclusion of
charitable recipient by education level
Grad School
College Grad
Some College
HS Grad
<HS Grad

28. 5%
10%
15%
20%
25%
30%
35%
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
U.S. population share with bachelor's
degree and above
55+ YEARS OLD
35 to 54 YEARS OLD

29. 0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ charitable
recipient among those with will/trust by
giving/volunteering
Donor & Volunteer
Donor only
Volunteer only
Neither

30. 30%
35%
40%
45%
50%
55%
U.S. aged 55+ giving ($500+) and
volunteering
volunteer
charitable giving

31. Wills
that
won’t
What ultimately
happened to
those written
and witnessed
will documents
reported during
life?

32. Reported wills are often unused
16%
38%
10%
19%
11%
6%
Distributed estates where decedent reported having a
written and witnessed will (n=6,063)
No will found
Will probated
Unprobated will: nothing
much of value
Unprobated will: estate
otherwise distributed
Unprobated will: trust
distributed
Unprobated will: other

33. Funded trusts more likely to work
75%
5%
10%
4% 2%
4%
Distributed estates where decedent reported having a
funded trust (n=913)
Funded trust exists
No documents
Will probated
Unprobated will:
Otherwise divided
Will - Nothing much of
value
Will - Unknown

34. Documents
• The will is only a back-up
document
• Ask about titling and
beneficiary designations
(especially qualified
plans!)
• Most wills are never used
– let me explain why
• Encourage trust planning
• Consider alternate will
language “a dollar
amount equal to __
percent of my adjusted
federal gross estate…”

35. Who are
these
people?

36. Lifetime predictors of a
post-mortem bequest gift

37. 1. % years giving
2. No offspring
3. Highest giving
4. % years
reporting
funded trust
5. Female
6. Last reported
wealth
7. Not married
8. Last reported
giving
9. Growing wealth
10. % years
volunteering

38. 20%
30%
40%
50%
60%
70%
8-10 years
premortem
6-8 years
pre-mortem
4-6 years
pre-mortem
2-4 years
pre-mortem
0-2 years
pre-mortem
Timing of Lifetime Surveys
Lifetime giving and
volunteering by estate
donors
Giving ($500+)
Volunteering
Bequest
givers
may not
be your
donors,
but many
used to
be

39. When do plans change?

40. Factors predicting when
charitable plans are
ADDED

41. 1. Approaching
death (final pre-
death survey)
2. Becoming a
widow/widower
3. Diagnosed with
cancer
4. Decline in self-
reported health
5. Divorce
6. Diagnosed with
heart problems
7. Diagnosed with
a stroke
8. First grandchild
9. Increasing
assets
10. Increasing
charitable giving

42. Factors predicting when
charitable plans are
DROPPED

43. 1. Decline in self-
reported health
2. Approaching
death (final pre-
death survey)
3. Becoming a
widow/widower
4. Divorce
5. Diagnosed with
cancer
6. Diagnosed with
heart problems
7. Diagnosed with
a stroke
8. First grandchild
9. First child
10. Exiting
homeownership

44. 1. Death feels near
• Final pre-death survey
• Decline in self-reported health
• Diagnosis with cancer
• Diagnosis with heart disease
• Diagnosis with stroke
• Becoming a widow or widower
2. Family structure changes
• Divorce
• First child
• First grandchild
• Becoming a widow or widower
Plans destabilize when

45. Most realized charitable plans (shown
in red) added within 5 years of death
Total Number Total $

46. Although most charitable plans were
added within 5 years of death, ONE longer-
term plan was worth FOUR made in the
last two years.

47. A 5% national sample of 2012 probate records
in Australia showed an estimated
• 31% of charitable wills were signed
within 2 years of death
• 60% were signed within 5 years of
death
Baker, Christopher (October, 2013) Encouraging Charitable Bequests by Australians . Asia-Pacific Centre for Social
Investment & Philanthropy - Swinburne University

48. Plans destabilize as death approaches
lifetime reports
made as death
approaches
post-mortem
transfers v. lifetime
reports
timing of the last
changes made to
the final will

49. Most still report charitable plans 10
years later
0%
10%
20%
30%
40%
50%
60%
70%
1993/4 to 2004 1995/6 to 2006 1998 to 2008 2000 to 2010
10-Year retention of charitable estate plans
age 70+
age 50-69

50. So where does
“Once in, Always in” come from?

51. Old
data
Post-mortem for
largest estates
Plans destabilize as death nears
We can see this only in
a LIFETIMEsurvey
not in a
ONE TIMEsurvey

52. The NCPG (2000) study showed
that 90% of planned bequest
donors don't change their plans
Fiction
Among those (avg. age of
58) WITH a charitable plan,
10% chose “Amount
Decreased” when asked
about their overall plan,
“Has the amount of the
charitable bequest ever
increased or decreased?”
Fact
It showed that IF charity stayed in,
plan changes decreased total
charitable amount 10% of the time

53. Practice suggestions
What now?

54. “Count it and forget it”
doesn’t work!

55. A bequest
commitment is the
beginning, not the
end
Higher value
in converting
to irrevocable
commitments:
gift annuities,
charitable
remainder trusts,
remainder interests
is homes and farms.

56. Charitable
plans signed
earlier
DO
produce larger
gifts,
IF
they stay in (or
they return
later)

57. Don’t
ignore
your
oldest
supporters

58. Half of all charitable bequest dollars came
from decedents this age and older…
Current U.S. study:
Age 88
New Australian study
(5% sample of national
probate files):
Age 90
Remember that most realized charitable
bequests are added within 5 years of death

59. Age at Will Signing
(by share of total charitable bequest $ transferred)
76%
11%
13% 80s+
70s
pre-70
Australian data from: Baker, Christopher (October, 2013) Encouraging Charitable Bequests by Australians . Asia-
Pacific Centre for Social Investment & Philanthropy - Swinburne University

60. For those 75+ with
lifetime connections,
stay “top of the mind”
(service, service
communication, mission
communication,
honoring/thank you, living
bequest donor stories)

61. Many of our customers
like to leave money to
charity in their will. Are
there any causes you’re
passionate about?
Would you like to
leave any money to
charity in your will?
No reference to
charity
Charitable bequest decisions are often
unstable and easily influenced
Charitable
plans among
1,000 testators
Charitable
plans among
1,000 testators
Charitable
plans among
1,000 testators

62. • Plans change every time a donor opens a
new account with a TOD/POD or changes a
joint account owner
• Plans become unstable as death approaches
• Stay connected! Stay communicating!
The score doesn’t count until
the clock runs out

63. A realistic boom is
starting soon (5 years)
But,
trusts do
Wealthy, consistent
donors with a trust
(especially childless
and unmarried)
Approaching
mortality
& family changes

64. My
favorite
student
evaluation
from a
personal
finance
class…
This class
sucked. It was
all about reality.
I didn’t want to
know this
stuff.

65. Russell James, J.D., Ph.D., CFP®
Professor
Texas Tech University
www.EncourageGenerosity.com
www.EncourageGenerosity.com/ACBD.pdf
Encouraging generosity:
The demographics of charitable
estate planning

66. Drilling
down…

67. Race and ethnicity in charitable
planning

68. 0%
2%
4%
6%
8%
10%
12%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ inclusion of
charitable recipient among those with will
or trust by race/ethnicity
White (NH)
Black (NH)
Hispanic

69. 10%
20%
30%
40%
50%
60%
70%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ use of will or
trust by race/ethnicity
White (NH)
Black (NH)
Hispanic

70. 0%
1%
2%
3%
4%
5%
6%
7%
8%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ inclusion of
charitable estate recipient by
race/ethnicity
White (NH)
Black (NH)
Hispanic

71. Trends in use of
funded trusts

72. 0%
2%
4%
6%
8%
10%
12%
14%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ use of
funded trust by race/ethnicity
White (NH)
Black (NH)
Hispanic

73. 5%
6%
7%
8%
9%
10%
11%
12%
13%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ use of
funded trust by household type
Married Households
Single Female HH
Single Male HH

74. 0%
5%
10%
15%
20%
25%
30%
35%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ use of
funded trust by wealth
Top 20%
60%-80%
40%-60%
20%-40%
Bottom 20%

75. 0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ use of
funded trust by education level
Grad School
College Grad
Some College
HS Grad
<HS Grad

76. Extra details

77. 8.0%
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
11.5%
1998 2000 2002 2004 2006 2008 2010 2012p
U.S. population aged 55+ inclusion of
charitable recipient among those with will
or trust by household type
Married Households
Single Female HH
Single Male HH

78. What are the best multi-item models to predict the
amount of money left to charities at death?
Items 1 2 3 4 5 6 7 8 9 10
base rate 1,499 703 -242 -199 -826 -561 -836 -636 -567 346
Average
$k giving 1,415 1,344 1,340 1,024 1,004 1,078 1,056 1,044 1,244 1,250
Last reported
wealth $k 4 4 3 3 5 4 4 4 5
No offspring exists 9,774 9,722 9,815 9,807 9,917 9,868 9,844 9,325
$k of giving in
last report 336 341 317 301 293 286 286
% years reporting
funded trust 9,960 11,125 10,049 10,014 10,096 10,195
Highest reported wealth $k -2 -4 -5 -5 -5
Average reported wealth $k 7 10 10 10
Lowest reported wealth $k -13 -13 -12
Highest $k year of giving -113 -114
Married -2,409

79. What is the combined effect (considering both
adding and dropping) of various lifetime changes on
the presence of a charitable plan existing
rank Δ factor Δ in conditional
probability
1 Start (stop) giving 0.0798
2 Start (stop) volunteering 0.0585
3 Increase assets by 10k 0.0001
4 Increase annual volunteering hours by 100 0.0091
5 Being diagnosed with cancer 0.0728
6 $1k change in giving to charity 0.0010
7 Becoming a widow/widower 0.0572
8 The last survey before death 0.0528