Wednesday, August 27, 2014
According to a 2010 Survey of Consumer Finances, the median inheritance for Americans is about $69,000. Yet an eye opening study from Maury Gittleman and Edward N. Wolff examined the prosperity of households between 1989 – 2007, and found the most likely Americans to inherit were those who needed it the least. On average, 38 percent of households earning $250,000 a year or more received an inheritance compared with only 17 percent of households with an income of $15,000 or less. Furthermore, the study indicated that wealthier households are not more likely to inherit and they receive larger sums.
Racial and ethnic differences were widespread as well. Twenty-five percent of non-Hispanic whites said they had received an inheritance in 2007, but 10 percent of African-Americans and 6 percent of Hispanics said the same. These gaps have stayed constant since 1989.
While it may be true that inheritance and other transfers have a sizable effect on reducing the inequality of wealth, this is just one study. There are other studies in the U.K. and Paris that have reached different conclusions. Moreover, inheritors may not be receiving wealth in the form of cash. Businesses and homes are also common inheritances not provided for in this study.
See Mona Chalabi, A Dear Mona Follow-Up: Who Inherits? FiveThirtyEight, Aug. 26, 2014.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.