When Plans Change | Sharpe Group
Posted November 1st, 2013

When Plans Change

The Sharpe Group welcomes a new contributor this month. Professor Russell James, J.D., Ph.D., CFP® of Texas Tech University runs the on-campus and online graduate program in charitable financial planning. He will be sharing new findings from his latest research into the demographics of charitable estate planning.

One of the great unanswered research questions in charitable bequest giving is, “When do plans change?” The question couldn’t be answered before, because previous data only revealed a single point in time. For example, a few small surveys asked people about their current plans—but only once. IRS or probate records gave another snapshot—plans existing at death. However, nothing tracked how people changed their plans from year to year. Nothing connected survey responses given during life with actual post-mortem transfers.

Until now. The new American Charitable Bequest Demographics publication1 reports data from a 20-year study tracking older adults. The same survey respondents were asked every two years about their charitable estate plans. For over 10,000 respondents who are now deceased, these lifetime responses were connected to actual post-mortem transfers.

Instead of a “snapshot” of a single point in time, this study gives us the whole 20-year movie. For the first time, we can answer these important questions.

What triggered adding a charitable beneficiary?

Using advanced statistical methodology2, the following were the top 10 factors predicting when a charitable component would be added to an estate plan. [These are plans that previously had no charitable beneficiary.]

1. Approaching mortality (i.e., it was the final lifetime survey of a decedent)

2. Becoming a widow/widower

3. Diagnosis with cancer

4. Decline in self-reported health

5. Divorce

6. Diagnosis with heart problems

7. Diagnosis with a stroke

8. First grandchild

9. Increase in assets

10. Increase in charitable giving

What triggered dropping charitable beneficiaries?

Using the same methodology, the following were the top 10 factors predicting when the charitable component would be dropped from an estate plan. [These are plans that previously had a charitable beneficiary but then had none.]

1. Decline in self-reported health

2. Approaching mortality (i.e., it was the final lifetime survey of a decedent)

3. Becoming a widow/widower

4. Divorce

5. Diagnosis with cancer

6. Diagnosis with heart problems

7. Diagnosis with a stroke

8. First grandchild

9. First child

10. Exiting home ownership (e.g., for renting, living with relatives or nursing home)

The predictors of both adding and dropping charitable plans were very similar, suggesting that these were predictors of estate planning activity. New planning activity makes it more likely that existing charitable beneficiaries would be dropped and also that new charitable beneficiaries would be added. These planning triggers mostly fit into two categories, (1) mortality concerns and (2) changes in family structure.

When were actual post-mortem charitable transfers planned?

The next analysis examined the 6 percent of decedents who actually generated a post-mortem charitable transfer (among the over 10,000 respondents in the survey who are now deceased). Two-thirds of these charitable decedents had reported not having a charitable beneficiary in their estate plan within five years prior to passing.

These “late addition” decedents produced 54 percent of all charitable estate dollars transferred to charity. These results suggest that most charitable estate plans, and most charitable estate dollars, were added to plans within five years of the date of passing. These “late addition” changes also fit with the prevalence of mortality related predictors of lifetime charitable plan changes. Simply put, plans change when mortality concerns become real.


Charities need to get the right message to the right people at the right time. Reaching people at the right time usually means reaching them when plans are being changed. This new information shows that plans change in response to mortality concerns and changes in family structure. Given the dominance of charitable planning changes in the last five years prior to mortality, the easiest step in reaching people at the right time is to age stratify communication with supporters of the charity. As personalized relationships increase detailed knowledge of supporters’ lives, planned giving fundraisers should keep in mind the triggers of charitable planning and be ready to assist in these times of change.


1. Available at www.sharpenet.com/resources/white-papers.
2. Fixed effects longitudinal analysis with ranking by relative statistical significance examining changes associated with changes in charitable planning status in the Health and Retirement Study.



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