Academic Events

The Role of Trusts in the Intergenerational Transfer of Housing Wealth

10:30 am-12:00 pm, March 27, 2026 (Friday)

Room 904, Teaching Complex D Building

Chamna Yoon

Seoul National University

Owner-occupied housing is the primary source of wealth for most U.S. households, making the intergenerational transfer of housing a central component of estate planning. Yet little empirical evidence exists on how legal instruments—particularly trusts—shape the transfer of real estate wealth. This is surprising since inheriting a house is one of the few affordable ways to obtain home ownership. This paper studies the role of trusts in facilitating intergenerational housing transfers, combining newly assembled linked administrative data with a dynamic model of parental decision-making. Using property records, household address histories, and mortgage data, we document that trusts are the dominant estate planning tool for housing wealth, while inter vivos gifts play a limited role. To interpret these patterns, we develop a dynamic optimal stopping model in which an altruistic parent chooses whether to retain, gift, sell, or place a house into a trust under uncertainty about longevity, transaction costs, taxation, and probate. Estimation using data from older homeowners in San Diego reveals that the utility from remaining in the home is large, making outright transfers and sales rare. Trusts are attractive because they allow parents to retain control while reducing planning uncertainty and avoiding delays associated with probate. Savings in legal fees account for only a small share of the benefits of trusts, whereas reductions in hassle and uncertainty are central. Policy counterfactuals show that lowering probate legal fees has limited effects on trust formation, while reducing non-monetary probate costs substantially reduces the use of trusts and increases housing market liquidity through higher sales.

Chamna Yoon is a professor of economics at Seoul National University. He received his Ph.D. in Economics from the University of Pennsylvania in 2013. Before joining Seoul National University, he worked at the City University of New York (Baruch College), SungKyunKwan University, and KAIST. His current research focuses on structurally estimating economic models to analyze issues in public economics and urban/housing economics. His research has been published in top economic journals, including the American Economic Review, Journal of Political Economy, and Journal of Financial Economics.