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Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Clear out junk files and repair common Windows errorsFree Scan →Scan for outdated or missing drivers - takes under a minuteDriver Scan →Generational wealth is money, property, or other valuable resources passed from parents or relatives to children and other family members. It can also include support—such as paying for education—that helps someone build wealth later. Transfers may happen during a giver’s lifetime or through an inheritance after death.
What counts as generational wealth?
The term covers more than an inheritance check. The Consumer Financial Protection Bureau (CFPB) includes cash, property, anything else with financial value, and investments in a child’s education, such as paying for college or vocational training. “Intergenerational wealth” is another name for it. In financial analysis, wealth is often considered through a family’s balance sheet; the term can also refer more broadly to particular assets and support that may shape future financial opportunity.
For example, a family might pass on savings, a home, or a business. It might also help a younger relative pay for training. These resources differ in form, timing, and how readily they can be converted to money, but each can contribute to a family’s financial position across generations.
How do families pass wealth to the next generation?
Transfers can be direct—assets or money move from one person to another—or indirect, when a family invests in a relative’s future ability to earn and accumulate assets. The Federal Reserve describes both kinds of transmission.
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| Pathway | What it can include | How it passes value forward |
|---|---|---|
| Bequest or inheritance | Money, financial assets, real estate, or a business transferred after death | Assets become part of what a family member receives from the estate. |
| Lifetime gift or support | A gift of money or assets, including help with a home down payment | The giver transfers resources while alive. The Federal Reserve calls a lifetime transfer an inter vivos transfer. |
| Education investment | Help paying for college, vocational training, or other education | It may increase a person’s future earning capacity and ability to build assets, rather than transferring an asset directly. |
What a family can pass on—and whether the value can be managed or preserved—depends on its circumstances. The evidence does not establish one best transfer method for every family.
Does generational wealth only mean inheritance?
No. Inheritance is one direct route, but wealth can also move through lifetime gifts and support. Education is an indirect route: rather than handing over property or cash, a family may pay for training that can improve a younger person’s future earning and wealth-building opportunities.
The distinction matters because a transfer can be valuable even when it is not an asset recorded in the recipient’s name. At the same time, educational support is not a guaranteed financial return; the Federal Reserve describes it as a potential influence on later earning and wealth accumulation.
How common are inheritances, and how unevenly are they distributed?
U.S. Federal Reserve researchers Laura Feiveson and John Sabelhaus analyzed Survey of Consumer Finances data pooled from 1995 to 2016. In their 2018 analysis, households received an inheritance or substantial gift at a historical average of about 2 million households per year, and combined inheritances and lifetime transfers averaged about $350 billion annually in 2016 dollars. These are averages for that period, not current annual counts or a forecast of what any household will receive.
The same analysis found that inheritances of $1 million or more accounted for about 2% of inheritance counts but 40% of inheritance dollars. That historical distribution illustrates why a simple average can obscure how concentrated inherited wealth is.
The Federal Reserve’s latest Survey of Consumer Finances report identified here is its October 2023 report on the 2019–2022 survey wave. The older transfer figures above come from a separate analysis of 1995–2016 data; they should not be read as estimates for 2026. The survey describes family finances, not an individual family’s future inheritance.
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Can education or a home be part of generational wealth?
Education can support future wealth-building
In its 2020 report discussing 2019 Survey of Consumer Finances data, the Federal Reserve reported that the typical family with a college-educated parent had about 1.7 times the wealth of a family without a college-educated parent. This is an association, not proof that parental education alone caused the wealth difference. The Federal Reserve also notes that a family’s own education is a stronger predictor of its wealth than its parents’ education.
Home equity can be passed on, but access has not been equal
Home equity is a home’s value minus the debt tied to it. If a property is passed to children, that value can become part of the next generation’s resources. The CFPB’s discussion of home equity places this pathway in the history of redlining and unequal access to housing and credit; homeownership is not equally available to every family and is not risk-free or the right choice for everyone.
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In prepared remarks at a National Fair Housing Alliance event on January 12, 2023, CFPB Deputy Director Martinez described homeownership as “a key building block to generating inter-generational wealth,” particularly in communities historically shut out from fair access to the housing market. The statement points to both the potential role of housing and the unequal conditions under which families have had access to it.
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