About 40% of Heirs Say They Can’t Afford an Inherited Home

Kiplinger ^ | 10/10/2025 | Kate Schubel

[SeekAndFind]

The greatest generational wealth shift in history has already begun.

Baby Boomers, the largest retirement generation to date, will finish shifting up to $105 trillion to heirs by 2048. And according to a recent LegalZoom survey*, 62% of what will be left behind is anticipated to be real estate or property.

But rising home maintenance costs could pose a problem for younger generations.

For instance, property values have increased “almost 27% faster than inflation since 2020,” per the Tax Foundation. And with higher home valuations, heftier property tax bills typically follow.

So will the inherited wealth be enough to support the higher costs of homeownership? Or will heirs need to sell priceless heirlooms to stay afloat?

Heirs may be unprepared for high property taxes and home costs

Per the LegalZoom survey, 42% of Young Americans don’t feel “financially prepared to keep and maintain” an inherited home left to them today. Among their top concerns when inheriting a house include:

• Property taxes. About 47% of potential heirs expect to inherit property, but 20% are concerned they won’t be able to afford the property taxes on the heirloom house.
• Maintenance costs. About 20% of young Americans are concerned about being able to maintain an inherited property after it’s passed down to them (which may include hidden home costs like home insurance and repairs).
• Property debt and legal complexities. Approximately 23% of future heirs are concerned about expensive surprises associated with a home. Mortgages, home equity loans, tax liens, and tricky legalities could intimidate heirs when inheriting a house.

So, while 62% of the older generation(aged 45 and above) surveyed by LegalZoom expect to leave behind real estate to their loved ones, only 18.6% of younger Americans in the survey actually feel “very prepared” to maintain an inherited property.

House-rich but cash poor?

Although inheriting a house may sound exciting, future generations may struggle to maintain a home left in the family will. And that’s not just because home costs are rising.

Other factors contributing to a “house-rich, cash-poor” mentality are generation-specific. For instance:

• According to a recent LendingTree study, Generation X may carry the highest median non-mortgage debt among other generations (including credit card debt, student loans, etc.).
• Millennials may struggle even more with outstanding loans. Over half have more debt than savings, according to a recent Bankrate report.
• Generation Z could face difficulty with overall financial stability. One Deloitte survey* found that 56% of Gen Zers live paycheck to paycheck.

Thus, instead of using an inherited home as a priceless heirloom, future generations may use that real estate to help them pay off debt, which may be disappointing news for those hoping to pass down a family home to be used by future generations.

*Note: Deloitte surveyed 14,468 Gen Zs from 44 different countries.

Start talking to your heirs now: Inheritance tax may be tricky

While talking about wills and estates with your heirs may be uncomfortable, it’s important to take the time now to discuss what the future looks like for your family.

Here are a few tips to get the sensitive wealth transfer talk started in your household:

• Ask your heirs questions about their financial situation. If you feel comfortable, you may want to broach topics like “What do you want your future to look like?” or “What are some of the biggest financial goals or challenges you have?” Creating a customized plan that works for all generations involved will help ensure you know how your assets will be handled after you’re gone.
• Be honest about your own financial situation. Do you still have any outstanding debts? How will taxes on your assets look for your heirs? According to the LegalZoom survey, over 50% of young Americans aren’t confident that they understand how inheritance taxes could affect their inherited wealth — you can help bridge that gap in understanding now.
• Discuss options. If your heirs aren’t very liquid, you may want to talk about the possibility of selling certain assets in the near future. You may also want to offer advice on which investments could be the best fit for their financial situation. Remember: some of the greatest wealth you can pass on to future generations is the wisdom you’ve learned through your own journey, and not just the assets themselves.

Overall, the most important component of family finance is ensuring that the plan works for everyone.

So if you haven’t had a conversation with future heirs about generational wealth, or are worried about taxes affecting your loved ones’ inheritance, make a plan to talk with your heirs and consult with a qualified estate planning or tax professional sooner rather than later.

Read More

• How the Big GOP Tax Bill Could Change Your Estate Planning
• What is the Gift Tax Exclusion for 2025?
• States That Won't Tax Your Death

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TOPICS: Business/Economy; Society
KEYWORDS: inheritance; taxes

[21twelve]

Sort of like on those game shows. I’d rather win $40,000 than win a $60,000 car (which I may not like) and then have to pay taxes and fees on it.

Although it’s better than flying home with the $1,000 consolation prize.

[100%FEDUP]

Wasn’t repealing the Capital Gains Tax in the Contract with America?

[sauropod]

.

[norcal joe]

I can’t argue with that. :)

[Ikeon]

Really? 40%? Who did they survey? Teens? 20 or 30 somethings?

Just wondering. B3cause a mature adult should be able to handle a parents inheritance, be it keep the house or sell it. Its really a very morbid and misleading question and the participants dont have a grasp on the total concept of inheritance and what's involved??

40% of the people surveyed are afraid of home ownership because they may have to grow up and pay bills? They cant figure out how to contact a realtor??

People really are that dumb.

[sauropod]

I’m a man of few words. :-)

[Raycpa]

We have 4 kids, hopefully they will be in their 60s when we pass. I assume they will have their own homes and be close to paying it off. Why would they keep our house?

[cpdiii]

My assets are considerable. Upon the death of the last surviving spouse all monetary assets will be divided between her children and my children. This is a second marriage for both. Property is to be sold unless one heir wants to buy out the other heirs. The sale of these properties is to be divided between all equally. My spouse and I have a few personal items some of value but others not much to be given to an individual heir. Each heir has a copy of the will so there will be no bickering about what each expected.

I have seen insane lawsuits of one family member against another in contested wills. It destroys the family and is just plain damn ugly and in most cases wrong.

[HANG THE EXPENSE]

Get insurance to pay the taxes which can be pricey depending on the state.

[T.B. Yoits]

Multiply this by entire sections of the world - the inheritors can't afford to keep paying for decayed cities that no longer serve the purpose they once did.

Assets quickly become liabilities.

[Political Junkie Too]

Who did they survey? Teens? 20 or 30 somethings?

Yeah... check this out.

Baby Boomers, the largest retirement generation to date, will finish shifting up to $105 trillion to heirs by 2048... So, while 62% of the older generation(aged 45 and above) surveyed by LegalZoom expect to leave behind real estate to their loved ones... According to a recent LendingTree study, Generation X may carry the highest median non-mortgage debt among other generations (including credit card debt, student loans, etc.).

Boomers are not 45 year olds. The youngest Boomers are around 65 years old right now. That fits the end date of 2048, when 65 year olds will be 88 by then.

How many Boomers have children under the age of 45? The children of Boomers are Generation X (b. 1965-1980). These children would have finished college by 2005. The student debt crisis didn't begin until Obama nationalized the student loan industry in 2010.

Somebody's math is off here.

-PJ

[mass55th]

Never inherited anything myself. I own nothing. Have no savings, no stocks, bonds, nothing. My two sons will get to split a $50,000 life insurance policy, and be happy with that.

[DIRTYSECRET]

Will they wipe your ass or hose you down?

[Repeal The 17th]

We are in the same boat.

[ansel12]

“””””The youngest Boomers are around 65 years old right now.”””””How many Boomers have children under the age of 45?””””

Sixty one, not 65, and a heck of a lot of boomers would have kids under age 45 even the very first boomer from 1946 may have still been having sex when he was 34, look at boomers like Trump and Obama, and others.

[sjmjax]

If I used the appropriate language to describe my feelings about residential property taxes, I’d get permanently banned from this site.

[Valpal1]

Not true. My spouse and are 64 and 62, the youngest of the boomers. I had my first child at 35. They are Zoomers.

But it is a very small cohort of Zoomers with Boomer parents.

[mass55th]

"We are in the same boat."

It's a boat I'm happy to be in. Hope you can say the same.

[TauntedTiger]

I would think the vast majority of people who are worried about not being able to afford property taxes and home maintenance costs of an inherited home aren’t going to be paying any inheritance taxes. Which I guess is neither here nor there, just saying they likely aren’t worried about inheritance taxes.