A Behavioral Economics Analysis of Will Making Preferences: When to Begin and Who Should Have the Most Input?

Abstract

The global COVID-19 pandemic has highlighted the need to plan for death, including the transmission of property through a valid will. Surprisingly little is known, however, about when people tend to make wills, how they go about doing so, and whether those practices vary from jurisdiction to jurisdiction. To begin building a foundation of knowledge, a research team comprised of United States and Australian lawyers and economists recently conducted the first-ever behavioural economics empirical study exploring these questions. This Article reports the results of the team’s survey of both members of the Australian general public and estate planning lawyers in that country. The research aim was to elicit and compare the attitudes of members of both groups on three questions: (1) when people should begin to plan their estates in anticipation of death; (2) the relative role that the lawyer (compared to the client) should play in the estate planning process; and (3) whether remote witnessing rules for wills—newly adopted during the pandemic in several jurisdictions including states in Australia and the United States—have any impact on individuals’ expressed preferences towards will making.

The study yields three significant findings. First, members of the legal profession in Australia tend to prefer the execution of a will at a much younger age than members of the general public do. Estate planning attorneys tend to cite age 29 as the “right” time to make a will, but the general public tends to think that age 47 is best. Second, laypeople in Australia tend to hold widely divergent opinions on the appropriate balance of client vs. professional input into the estate planning process. Those who already have engaged at least once in the will-making process tend to desire far greater levels of input from estate planning attorneys than those who have never made a will. Attorneys, in contrast, have relatively uniform views about the same question, tending to cite 70% as the appropriate percentage of estate planning decisions that should be driven by the client. Finally, among both members of the general public and attorneys in Australia, expressed preferences on these matters appear to be largely unaffected by any stated benefits or drawbacks of remotely executed wills.

The survey’s focus on Australia was intentional. Australia is an industrialized, democratic country with both a largely capitalist economic and a history of innovation in the law of wills, trusts and estates. Furthermore, Australia’s population is smaller than that of the United States, making it easier to obtain a more representative sample. At the same time, we conceive of this study as the beginning point for further, cross-jurisdictional inquiries. Future research can explore whether or how attitudes about will making differ across jurisdictions, using the results reported here as a touchstone. Separate from any country-specific considerations, knowledge about when people make wills, how they do so, and differences between and among jurisdictions will allow lawmakers to make more informed decisions about whether to make permanent some of the pandemic-era rules that enabled the remote online audio-visual witnessing of wills.

Keywords: behavioral economics and law, cognitive bias, wills, estate planning, legal innovation, law and technology, legal profession

JEL Classification: K1, K11, K49