BofA finds inherited US firms outpace purchases
Inherited businesses are projected to outpace purchases among wealthy Americans next year, a structural shift driven by favorable tax policy, private capital growth and deepening wealth concentration.
Bank of America projects that inheritances will overtake purchases as the primary way wealthy Americans acquire companies in 2026. The firm’s survey of 1,400 adults holding at least $3 million in investable assets found that 23% of businesses will be inherited next year, compared to just 11% bought.
This represents a sharp reversal from 2022, when 28% of businesses were purchased and only 5% were passed down. The shift is a core component of the broader Great Wealth Transfer, the movement of $36 trillion to $124 trillion in assets from Baby Boomers to younger generations over the next two decades.
For market participants, the trend underscores accelerating capital concentration, with Federal Reserve Bank of St. Louis data showing the top 1% of U.S. households hold roughly $44 trillion—equal to the bottom 90%. “We have a lot of business creation in the U.S.,” Parker said. “That’s generally a very good thing, and that does tend to generate top skewed wealth distribution for the owners, obviously, who have a lot of resources.”
The data also aligns with broader private market dynamics. Apollo chief economist Torsten Slok pointed to data from Jay Ritter showing the median age of companies going public has risen since the Federal Reserve began raising rates in 2022. As private capital markets expand, well-capitalized firms are finding it easier to remain private rather than access public markets.
Tax incentives favor holding
The current regulatory environment actively encourages this generational handover. “We currently have a very strange situation” regarding inherited wealth taxation, Parker said. Recent legislative changes, including the One Big Beautiful Bill Act, raised the federal estate tax exemption to $15 million per person while preserving the step-up in basis for capital gains at death.
“It’s sort of like a tax benefit, a giveaway of taxes to people who pass it on to heirs, rather than the reverse,” Parker said. These provisions allow original owners to defer significant tax liabilities, maximizing the capital passed to the next generation.
Bank of America found a notable portion of business owners have no immediate plans to step away, with the majority ultimately intending to transfer ownership to their families. “That might be partly why people are holding on to these businesses for longer, and then handing them down to the heirs,” Parker said.
