Strings on Testamentary Gifts Less Common Than Thought

A survey conducted by PNC Wealth Management revealed that:

Only 30 per cent of high net worth individuals with estate planning documents include stipulations that heirs meet specific requirements in order to receive their inheritances.  At the same time, 62 per cent believe it is “important that each generation take responsibility for creating its own wealth”, the survey said.

Martyn Babitz, senior vice-president at PNC and a senior trust advisor for Hawthorn, which serves ultra-high net worth families, said that this sentiment appears to be at odds with not putting conditions into a will or trust. * * *

Of those who have attached conditions to their will or trust, 77 per cent have earmarked funds to be put towards the beneficiary’s education, while 46 per cent have identified funds to be used for basic needs, such as housing.

Nearly 30 per cent have set aside funds for the next generation, while 28 per cent have identified funds for business or career-related expenses, and 16 per cent have identified funds to be used for specific charitable donations.

Rebecca Knight, Wealthy Americans do not attach strings for heirs, Financial Times, May 28, 2007.

Another finding from the survey is that “people are more likely to have incentives attached to their estates.”

Special thanks to Prof. Joel C. Dobris of the University of California-Davis for bringing this article to my attention.