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Inter-vivos transfers and exchange

Publication Abstract

Norton, Edward, and C.H. Van Houtven. 2006. "Inter-vivos transfers and exchange." Southern Economic Journal, 73(1): 157-172.

Most parents divide their bequests equally among their children, whereas inter-vivos transfers are usually unequal. We propose that exchange is better for inducing inter-vivos transfers than bequests. Inter-vivos transfers can be adjusted quickly to the amount of care, are less costly than writing a will, and can be kept secret from other family members and the public. The results from national longitudinal data show that, as expected, if a parent gives any inter-vivos transfers, she is more likely to give to children who provide informal care. Informal care has no effect on the equality of intended bequests.

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