Some $124 trillion will pass to US heirs and charities by 2048, half of it from 2% of households. Who inherits, what it does to housing, and why taxes miss it.
The Scale of the Wave
How much wealth is about to change hands, and why the headline number misleads
Cerulli Associates projects that $124 trillion will be transferred in the United States through 2048, of which $105 trillion is expected to flow to heirs and $18 trillion to charity ✓ Established Fact [1]. The figure is real, but the picture it conjures — a rising tide of inheritance reaching every family — is not what the underlying data describe.
The core finding of this report is that the great wealth transfer is a concentration event, not a diffusion event. The money moving from the post-war generations to their children is enormous by any historical standard, but it is moving along the same channels that already divide households by wealth, race and housing tenure. In the United States, more than half of the projected $124 trillion — some $62 trillion — will come from high-net-worth and ultra-high-net-worth households, which together make up only 2% of all households ✓ Established Fact [1]. Federal Reserve research using the Survey of Consumer Finances finds that the wealthiest 10% of households already receive more than half of all intergenerational transfers, while the bottom 50% receive about 8% ✓ Established Fact [4]. The transfer will therefore make a minority of heirs much richer, leave most households roughly where they were, and widen the absolute distance between the two groups. This report examines how inheritance flows, housing markets and tax systems interact to produce that outcome, and why most rich countries tax this flow far more lightly than they tax wages.
The global numbers are of the same order. UBS estimates in its Global Wealth Report 2025 that more than $83 trillion will be transferred over the next 20 to 25 years, of which $9 trillion will move horizontally between spouses and $74 trillion vertically between generations ✓ Established Fact [2]. The largest volumes are expected in the United States, at more than $29 trillion, followed by Brazil at nearly $9 trillion and mainland China at more than $5 trillion [2]. The two estimates differ in scope and method — Cerulli models all American households through 2048, while UBS covers a shorter horizon and a global sample of millionaires — but both point to the largest intergenerational movement of private assets ever recorded. The source of the wave is demographic. In early 2025, according to the Federal Reserve’s Distributional Financial Accounts, the baby-boom generation held about 51% of all American household wealth, roughly $85 trillion ✓ Established Fact [3]. That wealth was accumulated during decades of rising asset prices, and it will now pass on as that generation ages and dies.
The return of inheritance is also a historical reversal. Thomas Piketty’s reconstruction of French estate records shows that the annual flow of inheritance was equivalent to 20-25% of national income between 1820 and 1910, collapsed to less than 5% by 1950 after two world wars, depression and inflation, and climbed back to about 15% by 2010 ✓ Established Fact [11]. On plausible assumptions about growth and returns, the same model projects a flow of 20-25% of national income by 2050 — a return to the inheritance intensity of the Belle Époque [11]. France’s Conseil d’analyse économique, the prime minister’s council of economic advisers, summarised the consequence in December 2021: inherited wealth now accounts for 60% of total French wealth, up from 35% in the early 1970s ✓ Established Fact [10]. Over the same period, private wealth rose from 300% of national income in 1970 to 600% in 2020 [10]. In the words of the council, the heir-free society of the post-war decades has been disappearing at great speed [10].
The timing of the wave varies by country, but its direction does not. Cerulli finds that nearly $100 trillion of the American total — 81% — will come from baby boomers and older generations ✓ Established Fact [1]. Millennials will ultimately inherit the most of any generation, about $46 trillion over the next 25 years, but over the next ten years it is Generation X that receives the larger share, $14 trillion against $8 trillion for millennials [1]. In the United Kingdom, the Resolution Foundation projected that annual inheritances would more than double over two decades and peak around 2035 ◈ Strong Evidence [14]. In Germany, economists at DIW Berlin and the Hans-Böckler-Stiftung estimated that up to 400 billion euros a year would be inherited or gifted until 2027, about 28% more than earlier estimates ◈ Strong Evidence [22]. In Japan, research by the Canon Institute for Global Studies put annual intergenerational transfers at about 80 trillion yen, of which 48 trillion yen was inheritance and 32 trillion yen gifts ◈ Strong Evidence [28].
The headline figures also conceal a sequence. Cerulli expects $54 trillion of the American transfer to pass first to surviving spouses, nearly $40 trillion of it to widowed women of the baby-boom and older generations, before it moves on to children, grandchildren and charities ✓ Established Fact [1]. UBS similarly counts $9 trillion of spousal transfers in its global estimate [2]. For many families, the first death changes the ownership of wealth but not the generation that holds it, and the second death may come a decade or more later. A further $18 trillion is projected to go to charity rather than heirs [1]. What reaches the next generation is therefore smaller, slower and later than the headline implies — and, as later sections show, it is reduced further for middle-income families by the cost of long-term care, while larger estates pass largely intact through trusts, business reliefs and lifetime gifts.
At the very top, the transfer is already under way. UBS’s Billionaire Ambitions Report 2025 found that 91 heirs inherited a combined $297.8 billion in 2025, an increase of 36% on the previous year ✓ Established Fact [37]. The bank projects that about $5.9 trillion will pass to the children of billionaires over the next 15 years [37]. In the same year, 196 new self-made billionaires accumulated $386.5 billion [37] — meaning inheritance now rivals entrepreneurship as a route into the global billionaire class. The size of the great wealth transfer is not in doubt. Its shape is the story: who receives it, when they receive it, what they do with it, and how lightly governments choose to tax it. The sections that follow take each question in turn, drawing on household surveys, administrative tax data and national registers from the United States, the United Kingdom, France, Germany, Japan, South Korea, Switzerland and the Nordic countries.
Concentration, Not Diffusion
Who actually receives the money
The defining feature of inheritance is not its size but its skew. In the United States, transfers of $1 million or more account for about 2% of transfers at death but 40% of the dollars transferred ✓ Established Fact [4]. Most households will receive little or nothing.
The most detailed evidence on who inherits comes from the Federal Reserve’s Survey of Consumer Finances, which has asked American families about inheritances and lifetime gifts since 1989. In a 2018 analysis, Federal Reserve economists Laura Feiveson and John Sabelhaus found that households in the top 10% of the wealth distribution had received more than half of all intergenerational transfers, counting both bequests and gifts made during the donor’s lifetime ✓ Established Fact [4]. Households in the bottom half of the distribution had received only 8% [4]. Ranked by income rather than wealth, the top 10% still received nearly 40% of all transfers [4]. The distribution of amounts is even more extreme than the distribution of recipients. Transfers of $1 million or more made up only about 2% of the number of transfers at death but 40% of the total dollars, and close to 50% of the dollars given as lifetime gifts [4]. The typical inheritance, in other words, is modest; the total is dominated by a small number of very large estates.
Federal Reserve economists Feiveson and Sabelhaus found that the top wealth decile received over half of all inheritances and lifetime gifts, while the bottom 50% received 8% [4]. In a counterfactual in which inherited wealth was spread equally, the top 10% share of wealth would fall from 73% to about 57% under a 3% real return, and to about 40% under a 5% return [4]. Inheritance is not a side channel of American wealth concentration; it is one of its main engines.
The skew runs along racial lines as well as wealth lines. The Federal Reserve’s analysis of the 2019 survey found that 30% of White families reported having received an inheritance, three times the share of Black families and four times that of Hispanic families ✓ Established Fact [5]. The typical White family held eight times the wealth of the typical Black family [5]. A 2022 study by John Bailey Jones and Urvi Neelakantan of the Federal Reserve Bank of Richmond found that Black individuals are much less likely to receive any inheritance or gift, that Black recipients receive smaller amounts, and that they have a much lower probability of receiving the very large transfers that dominate the totals ✓ Established Fact [6]. Among White households that had received transfers, mean net worth was $448,200, compared with $219,520 for White households that had not; among Black households, the corresponding figures were $150,000 and $53,700 [6]. The great wealth transfer will flow through families shaped by a century of unequal access to property, credit and housing, and it will carry those differences forward.
The same pattern appears in Europe, with different numbers. The OECD’s 2021 review of inheritance taxation found that, on average across the countries studied, the inheritances and gifts reported by the wealthiest 20% of households were close to 50 times larger than those reported by the poorest 20% ✓ Established Fact [8]. In France, the Conseil d’analyse économique calculated that within a single generation, half of all individuals will inherit less than 70,000 euros over their lifetime, while the top 1% will receive more than 4.2 million euros and the top 0.1% an average of 13 million euros net of tax ✓ Established Fact [10]. In Germany, Markus Grabka of DIW Berlin and Anita Tiefensee of the WSI estimated that heirs in the top fifth of the wealth distribution receive on average about 372,000 euros, against about 68,000 euros in the bottom fifth — where the median inheritance is just 12,000 euros ◈ Strong Evidence [22]. Across all three countries, the median heir receives a sum that is useful but not transformative, while a small minority receives fortunes.
In the United Kingdom, the picture is of a rising median combined with persistent gaps. The Resolution Foundation found that only 38% of adults born in the 1930s received an inheritance ◈ Strong Evidence [14]. The Institute for Fiscal Studies, in a 2021 study by Pascale Bourquin, Robert Joyce and David Sturrock, projected that the median inheritance for people born in the 1980s will be about £136,000, more than double the £66,000 expected by those born in the 1960s ◈ Strong Evidence [13]. Measured against lifetime earnings, the median inheritance rises from 8% for the 1960s generation to 14% for the 1980s generation [13]. The reasons are structural: later-born generations have parents with more wealth and fewer siblings with whom to share it [13]. Inheritance is therefore becoming more important for younger Britons in absolute terms. But the IFS also projected that, among households born in the 1980s, the median lifetime inheritance will be about £150,000 in the lowest fifth by lifetime income and about £390,000 in the highest [13].
The extreme top of the distribution shows the same dynamic in its purest form. UBS counted some 860 multigenerational billionaires in 2025, collectively controlling $4.7 trillion, up from 805 holding $4.2 trillion a year earlier ✓ Established Fact [37]. The bank describes the expected $5.9 trillion transfer to billionaires’ children over 15 years as the most significant generational wealth transfer in history [37]. Such fortunes are typically held in operating companies, holding structures and financial assets rather than in houses, which matters for how they are taxed — a point developed in section six. Cerulli’s American figures tell the same story from the other direction: households in the top 2% will account for $62 trillion of transfers, or more than half of the national total [1]. A transfer of this shape does not spread wealth; it relocates concentrated wealth from one generation of a family to the next.
The phrase great wealth transfer is usually illustrated with an average, and the average is precisely the number that misleads. When 2% of households supply more than half of all transfers [1] and $1 million-plus estates make up 2% of bequests but 40% of the money [4], the mean inheritance is a figure almost nobody receives. Policy debates framed around the average heir — or around a generation as a whole — systematically overstate how widely the windfall will be shared.
The concentration has a direct consequence for how the transfer should be discussed. Generational framing — boomers handing wealth to millennials — implies that an entire cohort will be lifted by its parents’ accumulation. The data instead describe a transfer within families, in which outcomes depend overwhelmingly on which family one is born into. The Conseil d’analyse économique concluded that inheritance inequality in France is much higher than the inequality observed in earned income ✓ Established Fact [10]. The Feiveson-Sabelhaus counterfactual makes the same point for the United States: if inherited wealth were evenly distributed, the share of wealth held by the bottom half of households would rise from 3% to between 15% and 26%, depending on the rate of return assumed ✓ Established Fact [4]. The transfer is therefore one of the most powerful forces shaping the next generation’s wealth distribution — and its default setting is to reproduce the existing one.
The Late Inheritance
Why the money arrives at 50 or 60, when it can change least
Longevity has transformed inheritance from a start-of-life asset into a late-middle-age top-up. The average French heir is now around 50 years old, compared with 30 at the beginning of the twentieth century ✓ Established Fact [10].
Rising life expectancy has changed the economics of inheritance as much as rising asset prices. The Conseil d’analyse économique found that the average age at which French heirs inherit is now around 50, against about 30 at the start of the last century ✓ Established Fact [10]. At the same time, transfers have shifted from death to life: around 1900, lifetime gifts accounted for just over 10% of all transfers in France, whereas today they account for almost half [10]. Estate transfers are therefore more spread out over time and much more planned than before [10]. Both changes matter for inequality. A large inheritance received at 30 can finance a home, a business or an education; the same sum received at 55 typically arrives after those decisions have been made. And planned lifetime giving is a strategy available mainly to families with enough wealth to give some of it away while still providing for their own old age.
British data point the same way. The Resolution Foundation projected that the most common age at which millennials will inherit is 61 ◈ Strong Evidence [14]. By that age, most people have already formed households, made their housing choices and built — or failed to build — a pension. The foundation found that nearly 64% of adults aged 20 to 35 have property-owning parents, but that the inheritances those parents will eventually leave will arrive too late to resolve the housing difficulties of their children’s thirties [14]. Inheritance received at 61 is more likely to supplement retirement or be passed on again than to change a life course. The timing also compounds the concentration described in section two: the heirs whose parents are wealthy enough to give during their lifetimes receive help when it matters most, while the heirs of modest estates wait until late middle age for a smaller sum.
The average French heir is around 50 [10], and the most common age at which British millennials will inherit is 61 [14]. By contrast, UK Finance found that first-time buyers who received family help were on average around 30 years old, against just over 32 for those who bought without it [39]. Parental money that arrives as a lifetime gift shapes housing outcomes; parental money that arrives as a bequest mostly does not.
The spousal stage of the transfer lengthens the wait further. Cerulli estimates that $54 trillion of American wealth will pass to surviving spouses before moving to the next generation, and that nearly $40 trillion of that will go to widowed women of the baby-boom and older generations ✓ Established Fact [1]. UBS counts $9 trillion of spousal transfers in its global estimate [2]. Because women live longer on average, the second death in a couple often follows the first by many years, and much of the wealth that will eventually reach children is first managed, spent or given away by a surviving spouse. For financial advisers, this sequence is a business opportunity; Cerulli’s research is written partly for firms seeking to retain assets across the transition [1]. For heirs, it means the generational handover is a two-step process, and for the median family, the second step may arrive when the children are themselves approaching retirement.
Long-term care is the other force that erodes what reaches the next generation, and it bears unevenly on different estates. In the United States, Medicaid is the main payer for nursing-home care, and since 1993 federal law has required states to recover the cost of that care from the estates of deceased beneficiaries — including, in many cases, the family home ◈ Strong Evidence [40]. Families with modest wealth, much of it in housing, are the most exposed: they must spend down their assets to qualify for public support and may then see the remaining home claimed after death. Large estates held in financial assets and trusts are far less affected, because care costs are small relative to their size. The result is a regressive leak in the transfer: the middle of the distribution loses a larger share of its intended inheritance to care costs than the top. The headline projections of trillions moving to heirs assume, implicitly, that this leak is modest.
Inheritance is not the silver bullet that will get a whole new generation on the housing ladder or address growing wealth gaps in society.
— Laura Gardiner, Senior Policy Analyst, Resolution Foundation, December 2017Wealthy families have long understood that timing is a lever, and tax systems have responded. Of Japan’s estimated 80 trillion yen in annual intergenerational transfers, about 32 trillion yen takes the form of gifts ◈ Strong Evidence [28]. From 1 January 2024, Japan extended the period in which gifts are added back to the taxable estate from three years before death to seven, with a deduction of 1 million yen for gifts made between three and seven years before death [29]. In Germany, assessed gift tax reached a record 4.8 billion euros in 2024, up 17.8% on the previous year, while assessed inheritance tax rose 9.5% to 8.5 billion euros ✓ Established Fact [21]. Lifetime giving is efficient for families that can afford it: it moves assets to children when they are most useful and, under many tax systems, at lower effective rates. But it is a privilege of surplus. A family whose wealth is concentrated in the home it lives in cannot give that home away early.
The late arrival of inheritance therefore reshapes its social function. In the nineteenth-century world that Piketty describes, inheritance determined the starting position of a life [11]. In the twenty-first-century version, for most families, it tops up the last decades of a life — a period in which it is more likely to be saved, spent on care or passed on again than invested in a first home or a business. For the wealthiest families, by contrast, structured giving, trusts and business transfers allow wealth to move earlier and more completely, and multigenerational fortunes have grown rapidly [37]. The same transfer that arrives late and diminished for the median heir arrives early and intact for the richest. Age, in this sense, is a further dimension of the concentration documented in the previous section, and it explains why a record transfer can coexist with stalled mobility for young adults.
Bricks and Mortar
How inheritance became the price of entry to home ownership
Housing is where inheritance most visibly shapes lives. In Norway, children of wealthier parents are nearly 15% more likely to own a home at 30, and they buy homes worth 15% more ◈ Strong Evidence [38].
The most rigorous recent evidence on the link between parental wealth and housing comes from Norway, whose tax registers allow researchers to follow families across generations. In a 2024 study, Ella Getz Wold, Knut Are Aastveit, Eirik Brandsaas, Ragnar Juelsrud and Gisle Natvik found that, after controlling for a wide range of characteristics, households with richer parents are nearly 15% more likely to be homeowners at age 30 ◈ Strong Evidence [38]. When they do buy, they take on more leverage and buy homes worth about 15% more [38]. To separate cause from correlation, the authors used movements in international stock markets as a source of variation in parental wealth that is unrelated to the children’s own characteristics [38]. They also identified less visible transmission channels, including the transfer of family property to children at below-market prices [38]. Early housing outcomes, in turn, strongly predict wealth accumulation by midlife [38].
The Norwegian study found that housing gaps caused by parental wealth explain 12% of intergenerational wealth persistence — as much as income, education and a range of other household characteristics combined [38]. In Britain, the Resolution Foundation found that 83% of millennial homeowners have at least one property-owning parent, while 46% of millennials who do not own have parents who do not own either [14].
British data show how parental wealth translates into housing wealth. The Resolution Foundation found that millennials with more than £200,000 of property wealth had parents with about £195,000 of property wealth per sibling, compared with about £85,000 per sibling for millennials who did not own a home ◈ Strong Evidence [14]. The family help increasingly comes before death rather than after it. UK Finance found in 2025 that first-time buyers who received help from family were on average around 30 years old, while buyers without such help were just over 32 [39]. The difference of roughly two years understates the gap, because assisted buyers also tend to purchase more expensive properties [39]. In practice, the transfer that matters for home ownership is the deposit, not the bequest, and it is available only to the children of parents with enough liquid wealth or housing equity to spare. The Resolution Foundation’s conclusion was that inheritance comes too late and is too unevenly distributed to solve the housing problems of young adults [14].
There is also a feedback loop between inheritance and house prices, although its strength is disputed. When a growing share of buyers can draw on family wealth, they can bid more for the same homes, and in markets where supply is constrained, that additional purchasing power is likely to be capitalised into prices ⚖ Contested [38]. Higher prices, in turn, raise the value of the estates that the next generation will inherit, and raise the deposit required of those who have no family help. The Norwegian authors found that house price expectations are a critical factor in determining how strong the housing channel of wealth persistence becomes [38]. Direct causal estimates of how much inherited money has raised house prices remain scarce, and the effect is difficult to separate from interest rates, planning restrictions and income growth. But the mechanism is consistent with the evidence that house price booms increase the intergenerational persistence of housing wealth, and with the finding that home ownership increasingly runs in families [14].
For the middle of the wealth distribution, the house is the inheritance — and that is where tax systems increasingly bite. Japan’s 2015 reform cut the basic inheritance tax deduction by 40%, from 70 million yen to 42 million yen for an estate with two heirs ✓ Established Fact [27]. Before the reform, only about 4% of heirs paid the tax [27]; by 2024, 10.4% of all decedents left estates subject to it ✓ Established Fact [26]. The reform was designed to turn a tax on the so-called haves into one that also reaches ordinary urban family homes [27]. In the United Kingdom, the Office for Budget Responsibility expects about one in ten deaths to incur inheritance tax by 2029-30, double the proportion in 2023-24; in 2009-10, the share was 2.7% ◈ Strong Evidence [16]. In both countries, the expansion of the tax reflects house price growth far more than any change in the concentration of large fortunes.
For most families, the inheritance is a house; for the richest, it is a company, a portfolio or farmland. That difference decides who pays. Property bequests in Tokyo and the English south-east are increasingly taxed [26] [16], while German business transfers above 20 million euros were over 90% exempt [23] and American heirs pay no capital gains tax on assets that rose in value before death [20]. The tax burden on inheritance is drifting towards the middle precisely as the largest transfers are protected.
The housing channel also helps explain racial wealth gaps in the United States, although the size of the inheritance effect itself is debated. White families are three times as likely as Black families to report an inheritance ✓ Established Fact [5], and home equity is the largest asset of most middle-income families. Yet a 2023 study by Jeffrey Thompson of the Federal Reserve Bank of Boston found that differences in intergenerational transfers account for only 13% to 16% of white/non-white private wealth gaps, and that differences in earnings and years of work explain 56% of the white/Black gap at the mean and 60% at the median ⚖ Contested [7]. Thompson identified three reasons why inheritance matters less than often assumed: most people do not receive one, most inheritances are not large, and recipients consume much of what they do receive [7]. Much of the effect of family wealth, he argued, works earlier — through education and human capital — rather than through bequests [7].
The housing evidence points to a clear conclusion. The great wealth transfer is unlikely to solve the housing affordability problems of younger generations, and it may deepen the divide within them. For those whose parents own property and can release equity or savings, family help has become a near-requirement for ownership in high-cost markets. For those whose parents rent, or whose parents’ homes will be consumed by care costs, the transfer brings little. The IFS projects that inherited wealth will be a much more important determinant of lifetime resources for today’s young adults than for their parents’ generation ◈ Strong Evidence [13]. In housing markets, that importance takes the form of a new dividing line: not between generations, but between the heirs of homeowners and everyone else.
The Equalising Paradox
How inheritance can narrow ratios while widening gaps
The most contested finding in this field is that inheritances can reduce measured wealth inequality. Swedish register data show the Gini coefficient falling by 5-10% after inheritances, even as absolute gaps between heirs widen ⚖ Contested [12].
The strongest challenge to the view that inheritance drives inequality comes from Sweden. Using population registers that link the wealth of heirs before and after they inherit, Mikael Elinder, Oscar Erixson and Daniel Waldenström found that inheritances reduce relative wealth inequality, measured by the Gini coefficient or by top wealth shares, by around 5-10% ◈ Strong Evidence [12]. The share of wealth held by the top decile fell substantially, while the share held by the bottom half rose from negative to positive [12]. The mechanism is arithmetic. Richer heirs receive larger inheritances in kronor, but poorer heirs receive more relative to what they already own; a 50,000-euro inheritance changes the position of a household with no net assets far more than a 500,000-euro inheritance changes the position of one with 5 million. The same study, however, found that inheritances increase absolute dispersion — the gap in money terms between rich and poor heirs widens [12]. It also found that the Swedish inheritance tax, before its abolition, reduced the equalising effect, although redistributing the revenue could reverse that result [12].
The British projections show the same duality. The IFS estimated that, for households born in the 1980s, inheritances will be worth around 15% of lifetime income for the lowest fifth by lifetime income and 16% for the highest — almost identical proportions ◈ Strong Evidence [13]. In money terms, however, the projected median inheritance is about £150,000 for the lowest fifth and about £390,000 for the highest [13]. Whether inheritance increases or reduces inequality therefore depends on the question asked. If the concern is the ratio between rich and poor, inheritance can look neutral or mildly equalising. If the concern is the absolute difference in resources — the size of the deposit one can put down, the business one can start, the risks one can take — inheritance widens the gap. Most public debate implicitly concerns the second, while much of the academic literature measures the first.
The American evidence leans towards the concentrating view. The Feiveson-Sabelhaus counterfactual found that if all inherited wealth were evenly distributed across the population, the share of wealth held by the top 10% would fall from 73% to about 57% under a 3% real rate of return, or to about 40% under a 5% return, while the share held by the bottom half would rise from 3% to between 15% and 26% ◈ Strong Evidence [4]. The authors concluded that direct intergenerational transfers account for a substantial fraction of wealth across all groups, and that policies to tax and redistribute them have the potential to greatly shift wealth around [4]. The French evidence points the same way: the Conseil d’analyse économique describes inheritance as extremely concentrated and as reinforcing wealth inequality based on birth, on a scale much higher than the inequality of earned income [10]. The difference from Sweden partly reflects the measures used, and partly the very different distributions of pre-existing wealth.
Inheritance Narrows Inequality
Swedish registers show the Gini coefficient falling by 5-10% after inheritance, as poorer heirs gain more relative to their wealth [12].
British projections put inheritances at around 15% of lifetime income in the lowest fifth and 16% in the highest [13].
The Boston Fed attributes only 13-16% of white/non-white wealth gaps to transfers, against 56-60% to earnings and work [7].
Most inheritances are not large, and recipients consume a good part of what they receive [7].
The median British inheritance is projected to double, from £66,000 for those born in the 1960s to £136,000 for those born in the 1980s [13].
Inheritance Entrenches Inequality
The same Swedish study finds inheritance increases absolute dispersion between rich and poor heirs [12].
The top 10% of US households receive over half of all transfers; the bottom 50% receive 8% [4].
Spreading inherited wealth evenly would cut the US top 10% share from 73% to 57% or lower [4].
Inherited wealth makes up 60% of French wealth, and inheritance inequality far exceeds earnings inequality [10].
UBS counts 860 multigenerational billionaires holding $4.7 trillion, up from 805 a year earlier [37].
The racial dimension of the debate illustrates the same tension. Federal Reserve data show White families are three times as likely as Black families to have received an inheritance ✓ Established Fact [5], and Richmond Fed researchers found that Black recipients receive smaller amounts and rarely receive very large transfers [6]. Yet the Boston Fed’s decomposition attributes only 13-16% of the white/non-white wealth gap to differences in transfers, with most of the gap explained by differences in earnings, years of work and pension coverage ⚖ Contested [7]. The two findings are compatible. Inheritances are unequally distributed by race, but because most people of all races receive little, the gap in inheritance explains a smaller share of the overall wealth gap than its visibility suggests. Thompson’s caveat is important: much of the influence of family wealth likely works through the human capital channel — paying for education, absorbing risks, supporting early careers — which bequest data do not capture [7].
The resolution of the paradox lies in recognising that inheritance has two different effects at two different ends of the distribution. In the middle, modest inheritances arriving late can narrow relative gaps, especially for households with little other wealth. At the top, very large transfers sustain and extend dynastic fortunes, with direct consequences for the concentration of economic and political power. UBS’s finding that 91 heirs received $297.8 billion in 2025 ✓ Established Fact [37] describes a phenomenon that relative inequality measures for the bulk of the population barely register. A tax and policy framework that treats inheritance as a single phenomenon will misread both ends. The question is not whether inheritance is equalising or concentrating in the aggregate, but which transfers are taxed, at what rates, and with what exemptions.
The debate is also constrained by poor data. The Conseil d’analyse économique warned that the unreliability of the French tax collection information system makes it impossible to assess the situation accurately, harming policy evaluation, tax enforcement and public understanding ✓ Established Fact [10]. The United States has no comprehensive register of inheritances; most evidence comes from household surveys that undercount the very top. Germany’s assessed transfers of 113.2 billion euros in 2024 [21] are far below estimates of the economic flow of up to 400 billion euros a year [22], largely because exempt and untaxed transfers are not fully captured. Japan is an exception: its National Tax Agency publishes detailed annual data on the number of decedents, taxable estates and average tax paid [26]. Better measurement would not settle the normative debate, but it would make clear how much of the transfer escapes tax altogether.
The Tax Architecture
How rich countries tax the transfer, and how they exempt it
Across the 24 OECD countries that levy inheritance, estate or gift taxes, these taxes raised on average only 0.5% of total tax revenue ✓ Established Fact [8]. The weakness lies less in headline rates than in exemptions.
The OECD’s 2021 report Inheritance Taxation in OECD Countries provides the most comprehensive comparison. A majority of OECD members — 24 — levied inheritance or estate taxes, but on average only 0.5% of total tax revenue came from inheritance, estate and gift taxes in the countries that levied them ✓ Established Fact [8]. The report identified generous exemptions and other forms of relief as a key factor limiting revenue [8]. It also argued that inheritance taxes, particularly those levied on recipients rather than on estates, generally impose lower efficiency costs than other taxes on the wealthy and are easier to assess and collect than annual wealth taxes [8]. The OECD’s conclusion was not that rates should simply rise, but that the base should be broadened and the design improved. Pascal Saint-Amans, who directed the OECD’s tax centre, warned that inheritance taxation is not a silver bullet and that reforms to the taxation of capital income and capital gains are also key [9]. The gap between a tax’s theoretical reach and its actual yield, in country after country, is explained by what it exempts.
While a majority of OECD countries levy inheritance and estate taxes, they play a more limited role than they could in raising revenue and addressing inequalities, because of the way they have been designed.
— Pascal Saint-Amans, Director, OECD Centre for Tax Policy and Administration, May 2021The United States illustrates how a tax can be both high-rated and nearly irrelevant. Under the law enacted in July 2025, the federal estate, gift and generation-skipping exemption rose to $15 million per person, or $30 million for a married couple, for deaths and gifts from 1 January 2026, and it is permanent and indexed to inflation ✓ Established Fact [18]. Even under the lower exemptions in place before 2018, only the wealthiest 0.2% of estates paid any federal estate tax [19]. The larger subsidy is less visible. Under the stepped-up basis rule, assets inherited at death are revalued to their market value, so capital gains accrued during the owner’s lifetime are never taxed. The Joint Committee on Taxation has estimated that not taxing gains at death costs about $40 billion a year ◈ Strong Evidence [20]. For the largest American fortunes, much of which consists of unrealised gains on shares and businesses, the transfer can therefore escape both estate tax and income tax entirely.
The United Kingdom has moved in the opposite direction, extending its inheritance tax to more estates. Receipts reached a record £8.2 billion in 2024-25, £750 million more than the year before and the fourth consecutive record ✓ Established Fact [15]. From April 2027, unused pension funds will be brought into estates for inheritance tax purposes, adding further revenue [15]. At the same time, the government softened its reform of reliefs for farms and family businesses. It announced on 23 December 2025 that from 6 April 2026 the threshold for 100% agricultural and business property relief would be £2.5 million per individual rather than the £1 million originally proposed, with 50% relief above that level, transferable between spouses so that a couple can pass on up to £5 million of qualifying assets free of tax ✓ Established Fact [17]. The tax payable can be spread over ten years, interest free [17].
Germany shows the scale of the gap between economic flow and taxed flow. In 2024, the tax authorities assessed 113.2 billion euros of inheritances and gifts and set 13.3 billion euros of tax, a record, of which 8.5 billion euros was inheritance tax and 4.8 billion euros gift tax ✓ Established Fact [21]. Against an estimated flow of up to 400 billion euros a year [22], that implies that most transfers are either below the generous personal allowances or exempt. The exemptions for business assets are central. DIW Berlin found that exemptions covered half of all assets subject to inheritance tax, that over half of transfers of 5 million euros or more were tax-exempt in 2012 and 2013, and that over 90% of transfers of 20 million euros or more were exempt ✓ Established Fact [23]. Removing the corporate privileges, DIW estimated, would raise annual revenue from around 5 billion euros to 13 billion euros in the medium term at existing rates [23].
DIW Berlin found that over 90% of transfers of 20 million euros or more were tax-exempt in 2012-2013, largely through relief for business assets [23]. The Federal Constitutional Court declared the then-applicable rules partly unconstitutional in December 2014 [23], and it will hear a new challenge to the business-asset relief in force since July 2016 on 13 October 2026 [24].
Headline rates — 55% in Japan, 50% in South Korea — dominate political debate, but effective burdens are set by reliefs for business assets, farmland, life insurance, pensions and unrealised gains. Those assets are concentrated at the top. The French council found that exemptions mainly benefit the largest transfers and sharply reduce progressivity at the top [10]; before its abolition, Sweden’s tax capped family-business owners at no more than 9% [35]. A tax that exempts the largest estates while reaching ever more family homes is not progressive, whatever its rate schedule says.
France taxes inheritance more heavily than its neighbours, and yet its own advisers describe the system as hollowed out. The Conseil d’analyse économique found that although the system is progressive in principle, its progressivity is weakened by exemptions — for life insurance, for the split ownership of property and for the transmission of family businesses — that have little economic justification and mainly benefit the largest transfers ✓ Established Fact [10]. Much of the revenue comes from an unexpected place: indirect inheritances, to siblings, nephews or unrelated heirs, make up less than 10% of the capital transmitted but more than 50% of inheritance tax receipts [10]. The council proposed taxing the total amount an individual receives over a lifetime, broadening the base by removing the main exemptions and lowering nominal rates, and estimated that such a reform could reduce inheritance taxes for 99% of the population while raising substantial additional revenue [10].
The case for business exemptions deserves a fair hearing. Defenders argue that taxing the transfer of a family firm can force a sale or a break-up, threaten jobs and discourage investment. A 2026 review by Philipp Dörrenberg of the University of Mannheim and Dominika Langenmayr of the Catholic University of Eichstätt-Ingolstadt set out those arguments alongside the evidence that exemptions distort succession decisions — favouring family heirs over potentially more capable outside successors — and enable avoidance through the timing of gifts and corporate restructuring ◈ Strong Evidence [25]. Their conclusion was that a system without special exemptions for business assets could be feasible if paired with a uniform, lower tax rate and more flexible deferral [25]. The liquidity problem that justifies exemptions can be addressed by allowing payment over time, as the United Kingdom now does for farms and businesses [17], rather than by exempting the asset altogether.
Japan is the clearest case of a broad, high-rate system. According to the National Tax Agency, 1,605,378 people died in 2024, and the estates of 166,730 of them were subject to inheritance tax filings — a taxable ratio of 10.4%, the first time the share has exceeded 10% ✓ Established Fact [26]. The average tax per taxable decedent was 19.46 million yen [26]. The top rate is 55% on the largest estates [27]. The broadening dates from the 2015 reform, which cut the basic deduction by 40% and turned a tax on the very rich into one that reaches the urban middle class [27]. The stakes are large: more than 60% of Japanese household financial assets, which totalled 1,883 trillion yen in 2020, are held by older people [28], and the 2024 extension of the gift look-back period to seven years was designed to stop that wealth from leaving estates untaxed shortly before death [29].
South Korea levies some of the highest rates in the world and is fighting over whether to cut them. The top inheritance tax rate is 50%, the second highest in the OECD after Japan, and a 20% surcharge on the shares of controlling shareholders raises the effective top rate on business successions to 60% ✓ Established Fact [32]. The family that controls Samsung completed payment of about 12 trillion won in inheritance tax over five years, the largest such settlement in Korea’s history [32]. In July 2024, the government proposed cutting the top rate from 50% to 40% and raising the deduction for each child from 50 million won to 500 million won ✓ Established Fact [30]. The National Assembly rejected the amendment in December, after the Democratic Party argued it would mainly benefit the super-rich; opposition leader Lee Jae-myung instead proposed exempting estates worth up to 1.8 billion won [31]. The Korean debate shows the political logic of the transfer: relief for the middle is popular, relief for the top is not.
Germany’s system is being tested in court. The Federal Constitutional Court will hold two hearings on 12 and 13 October 2026 ✓ Established Fact [24]. The first concerns a challenge by the Bavarian government, which argues that the federal legislature lacks competence over provisions on property valuation, personal allowances and tax rates [24]. The second concerns whether the relief for business assets in force since July 2016, which allows substantial reductions and even full exemption on the transfer of companies, is compatible with the constitution [24]. The court has been here before: in December 2014 it declared the previous rules partly unconstitutional, particularly the business exemptions [23]. A ruling against the current relief would force Germany to redesign the tax just as the volume of transfers peaks, and the outcome will be closely watched across Europe as a test of whether constitutional equality can constrain the exemption of large business fortunes.
Switzerland has chosen not to tax large fortunes at the federal level, and its voters have confirmed that choice emphatically. On 30 November 2025, a popular initiative launched by the Young Socialists, which would have imposed a 50% federal tax on estates and gifts above 50 million Swiss francs to fund climate policy, was rejected by 78.3% of voters ✓ Established Fact [33]. It was rejected in every canton [34]. The initiative had been launched in March 2024 by the youth wing affiliated with the Social Democratic Party, and its revenue was earmarked for climate projects [34]. Switzerland therefore continues to have no national inheritance and gift tax, nor any associated exit taxation [34]. The scale of the defeat suggests that, even in a direct democracy, a tax targeted only at the very richest can be portrayed as a threat to family firms and to the national economy.
Sweden and Norway, despite their egalitarian reputations, have abolished inheritance taxes altogether. Sweden repealed its century-old tax in 2004 ✓ Established Fact [35]. Research by Magnus Henrekson and Daniel Waldenström found that the tax had become a burden on the middle class — the exemption was a mere quarter of a production worker’s annual income — while the wealthy escaped through safety valves: family business owners paid no more than 9%, prominent families moved assets into foundations, and businesses were loaded with debt to reduce valuations [35]. The tax raised around 1-2% of government revenue or less [35]. Norway abolished its tax with effect from 1 January 2014 [36], and Portugal (2004) and Austria (2008) did the same [35]. The Scandinavian lesson is not that inheritance cannot be taxed, but that a tax which exempts the rich and reaches the middle will eventually lose political support.
Across the five cases, a pattern emerges. Countries that tax inheritance broadly, like Japan and the United Kingdom, increasingly reach middle-class housing estates while offering relief for business and agricultural assets [26] [17]. Countries with very high top rates, like South Korea, face sustained pressure to cut them, and a handful of large estates pay much of the tax [32]. Germany’s exemptions have twice drawn constitutional scrutiny [23] [24]. Switzerland and the Nordic countries have opted out at the national level altogether [34] [36]. None of these systems has managed to tax the largest transfers at rates close to those that apply to middle-class estates. The United States, with its $15 million exemption and stepped-up basis, has moved furthest towards not taxing the transfer at all ◈ Strong Evidence [18] [20].
What the Evidence Tells Us
Five lessons from the great wealth transfer
The great wealth transfer will not democratise wealth. It will hand the largest fortunes to the smallest number of heirs, late in life for most, through tax systems that exempt the assets the richest families hold ◈ Strong Evidence [1] [4] [10].
The first lesson is that the transfer is defined by concentration. The sums are vast — $124 trillion in the United States through 2048 [1], more than $83 trillion worldwide over 20 to 25 years [2] — but more than half of the American flow comes from 2% of households ✓ Established Fact [1], the top 10% receive more than half of all transfers and the bottom 50% receive 8% [4]. In France, half of a generation will inherit less than 70,000 euros in a lifetime while the top 1% receives more than 4.2 million [10]. Any policy discussion that begins from an average inheritance, or from a generation as a whole, misdescribes the phenomenon. The relevant unit is the family, and the relevant fact is that most families have little to pass on.
The second lesson is that timing matters as much as size. Heirs now inherit around 50 in France [10] and most commonly at 61 among British millennials ◈ Strong Evidence [14], after most of the decisions that inheritance could have influenced. The transfers that shape lives — deposits for first homes, support during education and early careers — are lifetime gifts available mainly to families with surplus wealth [39]. Spousal sequencing delays the generational handover further [1], and long-term care costs erode modest estates disproportionately [40]. The great wealth transfer, for the median family, is a late and partial top-up. For the wealthiest families, it is a planned, multi-decade process that moves assets early and intact.
The OECD and France’s Conseil d’analyse économique reach the same design conclusion from different directions: tax what each heir receives over a lifetime, from all sources, with a broad base and fewer exemptions [8] [10]. Such a tax rewards spreading an estate among many heirs, treats gifts and bequests alike, and removes the incentive to time transfers. The French council estimates it could cut inheritance taxes for 99% of people while raising revenue [10]. The obstacle is not technical but political.
The third lesson is that housing has become the main channel through which inheritance affects ordinary lives. Children of wealthier parents are more likely to own, own earlier and own more expensive homes ◈ Strong Evidence [38], and 83% of British millennial homeowners have a property-owning parent [14]. Family wealth increasingly determines access to ownership in high-cost markets, while rising house prices bring middle-class homes into inheritance tax nets in Japan and the United Kingdom [26] [16]. The transfer is likely to deepen the divide within younger generations rather than close the gap between them and their parents.
| Risk | Severity | Assessment |
|---|---|---|
| Dynastic concentration at the top | Some 860 multigenerational billionaires hold $4.7 trillion, and $5.9 trillion is set to pass to billionaires’ children within 15 years [37]. | |
| Housing lock-out for non-heirs | Parental wealth raises the odds of ownership at 30 by nearly 15% and explains 12% of wealth persistence [38]. | |
| Erosion of the tax base by exemptions | Inheritance taxes yield 0.5% of OECD revenue, and over 90% of the largest German transfers were exempt [8] [23]. | |
| Care costs consuming middle estates | Medicaid estate recovery and spend-down rules hit modest, housing-heavy estates hardest [40]. | |
| Political backlash against reform | Switzerland rejected a 50% tax by 78.3% and Korea’s Assembly blocked a cut, showing how polarised the issue is [33] [31]. |
The fourth lesson is that the tax architecture of rich countries favours the largest estates. Inheritance, estate and gift taxes raise on average only 0.5% of tax revenue across the OECD countries that levy them ✓ Established Fact [8]. The reason is not low headline rates but exemptions: relief for business assets that exempted over 90% of the largest German transfers [23], a stepped-up basis that forgives about $40 billion a year of capital gains tax in the United States [20], a US estate tax exemption of $15 million per person [18], and life insurance and family business reliefs that the French council says mainly benefit the largest transfers [10]. Meanwhile, broader bases in Japan and the United Kingdom reach more middle-class homes [26] [16]. The result is an inverted burden: the tax bites hardest on mid-sized estates made of housing and least on fortunes made of businesses and unrealised gains.
The fifth lesson is that reform is politically fragile but not impossible. Swiss voters rejected a tax on fortunes above 50 million francs by 78.3% ✓ Established Fact [33], Korea’s legislature blocked a cut for the very top [31], and Sweden and Norway abolished their taxes after they came to be seen as burdens on the middle and as easily avoided by the rich [35] [36]. Yet the United Kingdom has raised record receipts four years running [15], Japan has broadened its base [27], and Germany’s Constitutional Court may force a redesign of business relief this month [24]. The OECD and French evidence point to a design — a lifetime-receipts tax with a broad base, lower rates and deferral for illiquid assets — that could command wider support precisely because it would lower taxes for most heirs while reaching the largest transfers [8] [10] [25].
The great wealth transfer is often described as a generational event, a moment when the post-war generations hand their accumulated wealth to their children. The evidence describes something narrower and more consequential: a transfer within a small number of families that will determine, to a degree not seen since the early twentieth century, who owns the capital of the rich world. Inherited wealth already accounts for 60% of French wealth [10], and the flow of inheritance may return to 20-25% of national income by 2050 ◈ Strong Evidence [11]. Whether that produces a new society of heirs depends less on demography, which is fixed, than on tax design, which is a choice. The trillions will move regardless. What governments decide to exempt will determine how much of that movement simply reproduces the existing distribution of wealth.