Behavioral and Non-Behavioral Factors Affecting Will and Trust Ownership

27 Pages Posted: 18 Sep 2017 Last revised: 17 Oct 2018

See all articles by Zhikun Liu

Zhikun Liu

Employee Benefit Research Institute

Russell N. James

Texas Tech University

Date Written: September 1, 2017


The propensity for older adults to have estate planning documents has been declining noticeably in recent years, such that a majority of adults age 50 and over now have no will or trust documents. This study investigates factors associated with usage of will or trust documents. After reviewing the previous literature regarding factors associated with will and trust adoption, this paper explores these and a new behavioral factor that may provide insight into this decision-making process. First, the impact of hyperbolic discounting on estate planning decisions is analyzed cross-sectionally using the 2014 HRS (Health and Retirement Study) survey. The results indicate that among older adults (age 50 or above), those who have relatively longer financial planning horizons are more likely to have a valid will or trust, controlling for demographic, wealth, health, retirement, and education factors. People who demonstrate high future-discounting may tend to procrastinate will and trust adoption despite the need to do so. Next, a longitudinal analysis using all available waves of the 1998 to 2014 HRS data is conducted to expand our knowledge of changes over time within the same people that result in the adoption of estate planning documents. The insight gained can help financial advisors and counselors to encourage this important, and increasingly rare, financial planning activity.

Keywords: Behavioral Finance, Estate Planning, Time-Discounting

JEL Classification: D12, D31, D64, G02

Suggested Citation

Liu, Zhikun and James, Russell N., Behavioral and Non-Behavioral Factors Affecting Will and Trust Ownership (September 1, 2017). 2018 Academic Research Colloquium for Financial Planning and Related Disciplines, Available at SSRN: or

Zhikun Liu (Contact Author)

Employee Benefit Research Institute ( email )

1100 13th Street, NW
Suite 878
Washington, DC 20005-4204
United States

Russell N. James

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

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