Feb 8, 2026
With $124 trillion in total assets set to change hands between now and 2048, the Great Wealth Transfer is now well underway, according to research firm Cerulli Associates (1).
But one illiquid asset category still needs some careful consideration: real estate.
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According to data from the Federal Reserve, the baby boomers and remaining members of the silent generation own a combined $25 trillion in real estate.
While many may hope to pass down these properties to their heirs, the reality is that many families are not equipped for this transfer and haven’t laid out groundwork to make the transition as smooth as possible.
This includes setting up trusts and having tough financial conversations.
Many younger Americans aren’t prepared to inherit real estate
A new survey from LegalZoom shows that about 62% of older adults plan to leave real estate to their children — but 42% of younger Americans feel they wouldn’t be financially prepared to maintain an inherited property (2).
“Homes have so many memories and parents want to pass them on to children and want them to continue to make memories there,” said Jackie Garrod, a regional wealth manager at Northern Trust (3).
“It’s near and dear to their hearts so it’s a big decision, but parents need to have a conversation with their kids. There may be concerns by kids that parents want to think through.”
With housing affordability at record-low levels across the country, it’s critical that parents who want their children to inherit property ensure that they also bequeath enough assets for its maintenance.
As of 2024, the median age of first time home buyers is an all-time-high 38 years of age (4).
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This is an indicator that it’s more difficult than ever for younger adults to buy their first home, with experts citing factors like the housing shortage, few opportunities to save due to high rent prices and competition against wealthier buyers as reasons why the age of homebuyers has risen significantly.
Inheriting property might seem like a shortcut to financial health for a lot of young Americans, but the reality is that the wealth transfer isn’t a panacea.
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Top issues with inheriting real estate
Issues with inheriting real estate can include the costs associated with owning a property: maintenance, taxes, HOA fees, insurance and any remaining mortgage debt could be a drain on your heirs finances rather than a boost.
If the property is in an area prone to natural disasters, like floods and hurricanes, such inheritance may also bring problems down the road as the value of the property could drop significantly in the coming years.
If you’re planning to leave property to your heirs, it’s important that you discuss it with them thoroughly and understand their current financial picture.
Leaving them with enough money to maintain the property is essential if you are hoping they keep it and truly want it to be a gift and not a burden.
Preparing to transfer property… properly
When you have established that leaving your property to your children is a good move for them, there are some additional factors to consider. The methods for transferring property all have pros and cons and your circumstances will dictate which path is best for you.
LLCs
Limited liability companies (LLC) allow your heirs to bypass the probate process, as they inherit membership interests in the LLC, rather than the property itself. This reduces legal fees and delays associated with the probate process and has the added benefit that ownership can be transferred gradually during the owner’s lifetime, allowing for better estate planning and tax advantages.
Irrevocable trusts
Like an LLC, the trust owns the property instead of an individual. With an irrevocable trust, you give up control of the property and can’t make any changes to it, but this form of property transfer can potentially lower estate taxes for your heirs.
Revocable trusts
With this type of trust, you stay in control of the property and it stays in the estate. However, once you pass, the trust becomes irrevocable and the property is protected for your heirs. They can bypass the probate process and though trusts are more expensive to set up, they are often less costly in the long run for expensive assets like real estate.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Cerulli Associates (1); LegalZoom (2); USA Today (3); National Association of Realtors (4)
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Rebecca Holland is dedicated to creating clear, accessible advice for readers navigating the complexities of money management, investing and financial planning. Her work has been featured in respected publications including the Financial Post, The Globe & Mail, and the Edmonton Journal.
