Probabilistic Estate Planning

Authors

  • Ronald R. Crabb Assistant Professor of Finance, University of Wisconsin-Whitewater. Whitewater, WI 53 190.

DOI:

https://doi.org/10.1016/1057-0810(91)90030-3

Abstract

Probabilistic estateplanning is based on the principle of maximizing expected net present value commensurate with the riskassumed. Rather than assuming that death occurs at life expectancy, probabilistic estate planning treats death as a random variable. Compounded to randomly chosen ages of death, estate assets are taxed and distributed to heirs. The purpose of probabilistic estate planning is to find the estate plan and asset/liability combination that maximizes the expected net present value of assets passing to heirs and to convey some idea of the risk associated with that estate plan.

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Published

1991-12-30

How to Cite

Crabb, R. R. (1991). Probabilistic Estate Planning. Financial Services Review, 1(2), 143–157. https://doi.org/10.1016/1057-0810(91)90030-3

Issue

Vol. 1 No. 2 (1991): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1991 JAI Press Inc.

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