Transfers In Wealth Intensify Inequality

While many of us are still trying to recover after the recession, the richest Americans are preparing to transfer $6 trillion in assets over the next three decades. 

According to a report by global wealth consultancy Wealth-X, $16 trillion of global wealth will be transferred, primarily to family members, and 40 percent of that will be transferred within the U.S. 

Unfortunately, middle-class Americans will not be as privileged when transferring their wealth.  Although the expectation has been that every generation will do better than the last, this may not be the case for those who bought homes during the economic boom.  Since the recovery, American households have started to reduce their ownership of key assets, such as homes, stocks and business equity.  Furthermore, upward mobility has remained stagnant for middle-class Americans.  About 20 percent of children born in the middle-income distribution reached the top, a figure that has been unchanged in nearly a decade. 

In a report released last year by the National Bureau of Economic Research, “Such a large transfer of wealth [among the ultra-wealthy] will exacerbate wealth inequality.  African-American and Hispanic families are about five times less likely than white families to inherit money and when they do inherit money they inherit less than white families.”

See Quentin Fottrell, Prepare for the Largest Wealth Transfer in History, Market Watch, Jan. 13, 2015.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.