A major shift is underway in the United States as more family businesses are being passed from one generation to the next instead of being sold to outside buyers.
New research suggests this trend is accelerating among wealthy Americans, signaling that the ongoing Great Wealth Transfer could reshape business ownership and influence the country’s economic future.
Experts say the growing number of inherited companies reflects broader changes in wealth distribution, tax policy, and the way privately owned businesses are managed.
Inherited Companies Expected to Overtake Purchased Businesses
According to Bank of America’s latest Private Bank Study of Wealthy Americans, inherited businesses are expected to account for a significantly larger share of business ownership among affluent Americans in 2026.
The study projects that 23% of businesses owned by wealthy individuals will have been inherited, while only 11% will have been purchased.
This marks a dramatic reversal from just a few years ago.
In 2022, purchased businesses accounted for 28% of ownership among wealthy respondents, compared with only 5% that had been inherited.
The survey examined the financial habits of 1,400 Americans with at least $3 million in investable assets to understand how high-net-worth families are preserving and transferring wealth.
The Great Wealth Transfer Continues to Gather Pace
The changing pattern is unfolding alongside what economists describe as the Great Wealth Transfer, a decades-long movement of wealth from Baby Boomers to younger generations.
Estimates suggest that between $36 trillion and $124 trillion in assets could be passed down over the next 20 years, with affluent families expected to account for a substantial share of those transfers.
Because wealth in the United States is heavily concentrated among high-income households, experts believe the way these assets are inherited could have lasting effects on entrepreneurship, investment, and economic inequality.
Experts Link the Trend to Growing Wealth Concentration
Jonathan Parker, a financial economics professor at the MIT Sloan School of Management, believes the rise in inherited businesses reflects the increasing concentration of wealth in America.
He noted that while business creation remains a major strength of the U.S. economy, successful entrepreneurs often accumulate enormous fortunes.
As those business owners age, an important question becomes whether they choose to sell their companies or leave them to their children.
The issue has gained attention as wealth continues to become more concentrated.
Federal Reserve Bank of St. Louis data indicates that the richest 1% of U.S. households control nearly one-third of the nation’s total wealth—roughly equal to the combined wealth of the bottom 90% of American households.
Smaller Families Could Mean Larger Inheritances
Parker also pointed to long-term demographic trends that may be reinforcing this shift.
For decades, wealthier families have generally had fewer children than lower-income households. As a result, family fortunes are often divided among fewer heirs, allowing larger portions of wealth—including ownership of businesses—to remain concentrated within individual family members.
Although birth patterns are beginning to change in some regions, Parker said the traditional relationship between wealth and smaller family size has historically helped preserve family fortunes across generations.
Private Companies Are Staying Off Public Markets Longer
Another factor influencing the trend is the growing preference for businesses to remain privately owned.
Analysts say many companies are delaying public stock market listings as access to venture capital and private equity funding continues to expand.
With more financing available outside public markets, business owners often have fewer reasons to sell or launch initial public offerings.
As private firms mature without going public, owners may find it easier to keep businesses within their families instead of seeking outside buyers.
Tax Rules May Encourage Families to Hold Onto Businesses
Current U.S. tax policy may also be encouraging wealthy business owners to retain their companies until they can transfer them to heirs.
Parker noted that estate tax exemptions have increased substantially over the past two decades, while existing tax rules continue to provide a “step-up in basis” for inherited assets.
This provision can significantly reduce capital gains taxes when heirs eventually sell inherited property or businesses.
These incentives may make it financially advantageous for owners to postpone selling their companies and instead pass them directly to family members.
Many Owners Plan to Keep Businesses in the Family
The Bank of America report also found that many wealthy entrepreneurs are not planning to exit their businesses anytime soon.
Instead, a significant number intend to remain involved for as long as possible before eventually transferring ownership to family heirs or arranging family-led succession plans.
Economists believe this approach could further accelerate the rise in inherited businesses, giving the next generation greater influence over private companies and potentially reshaping the future landscape of American business ownership.
