Overall, Cerulli projects 42% of transfers will come from the top 1.5% of households. Increasing wealth inequality boosts the level of bequests because the richest Americans are less likely than the middle class—or even the merely affluent—to spend down their fortunes before they die, Horton said.
While some forms of wealth, like real estate, are more widely held, the rich control the bulk of stocks, bonds and other investments. Cerulli estimates households with more than $2 million control 62% of these assets, up from 48% in 2010.
For the ultra-rich, bequests will often end up in dynasty trusts, which can hold wealth that “will accumulate tax-free for an unlimited number of future generations,” according to the Americans for Tax Fairness report, co-written by William Rice and Robert Lord.
“If tax and other policies aren’t reformed soon, the wealth in dynasty trusts created by today’s billionaires will reach staggering heights,” the report said.
—With assistance from Laura Davison.
This article was provided by Bloomberg News.