Probability of Receiving an Inheritance

According to Federal Reserve data, approximately 20% of American households have received an inheritance, with significant variation by race and wealth. About 30% of white households have received an inheritance compared to about 10% of Black and Hispanic households, contributing significantly to the racial wealth gap.

The median inheritance amount is approximately $55,000, but the distribution is highly skewed: the average inheritance is about $207,000, reflecting a small number of very large inheritances pulling up the mean. About 40% of inheritances are under $25,000, 30% are between $25,000 and $100,000, 20% are between $100,000 and $500,000, and about 10% exceed $500,000.

The "Great Wealth Transfer" is expected to accelerate inheritance activity: an estimated $84 trillion in assets will be passed from baby boomers and the Silent Generation to Gen X, millennials, and Gen Z over the next 20 years. However, most of this wealth is concentrated among the wealthiest households. Only about 1.7% of estates are large enough (over $12.92 million in 2023) to owe federal estate tax. Financial planners recommend having estate plans regardless of wealth level, as probate proceedings can be costly and time-consuming without proper planning.