Generational wealth is one of the best gifts you can leave to your children. At the same time, many families have yet to historically have the wealth to leave, but that has changed in recent years. After the housing crash in 2008, housing prices rose dramatically. These trends led to wealth creation in many families, and people prepared to pass that wealth down to their children and grandchildren in their inheritance when they died.
This rise in housing prices has been significant. Inheritances have doubled for some people. However, since much of that wealth is tied up in housing, it can be difficult for people to access it when someone dies. The executor has to sell the home before distributing assets.
According to the Survey of Consumer Finances, the average inheritance is around $45,000, but the average expected estate is much higher, closer to $75,000. So, people are certainly seeing an increase in trends around inheritance amounts. However, that average is skewed towards the wealthy. Wealthy people inherit much more money than average people. Plus, they have assets to support them during the finance process. This is not something new. For at least a decade, the top 1/5th wealthiest households have almost 90% of inherited wealth. The bottom 4/5ths of households only have about 10% of inherited wealth.
Since many families are new to inheritances, they may not know some of the tricks to sustain their families financially during the probate process. Probate advances are a great way to access part of your inheritance before the end of probate. With money tied up in real estate, more and more people will likely be using probate advances to get earlier access to their money.
While many families have money to leave, around half of all American adults have a will. That means half of people will die intestate or without a will. In those instances, the probate process may be more complex and lengthy. State laws regarding intestacy and marital property can tremendously impact the disposition of assets after death.
The probate process is less expensive than people fear. For small estates, the attorney fees are only around $1500 to $3,000. For larger estates, you can pay about 3% of the total estate value to the attorneys handling the probate process. In fact, one reason that people may seek inheritance loans in an estate that consists mainly of a house is to help pay for those attorney’s fees.