Do People Save or Spend Their Inheritances? Understanding What Happens to Inherited Wealth

Almost $4 trillion dollars of wealth is currently held by families with a life expectancy of less than 10 years. When that wealth is inherited, will it be retained or spent quickly? Results from the NLSY79, a longitudinal survey covering people in their 20s, 30s, and 40s suggest roughly half of all...

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Bibliographic Details
Published in:Journal of family and economic issues 2013-03, Vol.34 (1), p.64-76
Main Author: Zagorsky, Jay L.
Format: Article
Language:English
Subjects:
Analysis
Bankruptcy
Bequests
Decision Making
Earnings
Economic behaviour. Consumption
Economic sociology
Economic theory
Estate taxes
Expenditure
Expenditures
Family
Family Life
Income tax returns
Income taxes
Inheritance
Inheritance and Succession
Inheritance taxes
Inheritances
Life expectancy
Longevity
Longitudinal studies
Original Paper
Personality and Social Psychology
Savings
Social Policy
Social Sciences
Sociology
Sociology of economy and development
Standard of living. Income
Studies
Tax rates
Wealth
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Summary:Almost $4 trillion dollars of wealth is currently held by families with a life expectancy of less than 10 years. When that wealth is inherited, will it be retained or spent quickly? Results from the NLSY79, a longitudinal survey covering people in their 20s, 30s, and 40s suggest roughly half of all money inherited is saved and the other half spent or lost investing. These spending and saving decisions are made by a concentrated group with about one-fifth of all families getting an inheritance and about one-seventh expecting to receive an inheritance. Suggestions to increase savings from inheritances are discussed.
ISSN:1058-0476
1573-3475
DOI:10.1007/s10834-012-9299-y