Bequest motive

• The most common explanation for this is altruism, in which it is held that the disponer gains some form of satisfaction from knowing that his/her heirs will enjoy their inherited wealth. An example might be a parent leaving a child the family home.
• Another common explanation is accidental bequest, developed by economists Yaari and Davies. Here it is not assumed that the disponer gains any specific benefit from leaving a bequest, but rather that lifetime is uncertain, and so she/he holds precautionary savings to insure him/herself against the risk of living too long. Unspent wealth at time of death is transferred according to intestacy law.
• Finally, exchange bequest occurs where disponers engage in a sort of strategic game in which potential beneficiaries must render a service in exchange for the promise of inherited wealth. The most widely read model of exchange bequest was published by Bernheim, Summers and Shleifer.