Not unheard of - people inherit great houses in fantastic locations that they have no money to keep and which they can't sell otherwise for various legal reasons. You're poor despite living in prime estate and despite theoretically having a net worth into 6 digits.
The property's transfer or sale may be prohibited by the terms of inheritance.
IANAL and am mostly familiar with this type of situation from rom-coms about down-on-their-luck dukes who live in crumbling, unsellable castles, so I'm not sure if that scenario truly exists in law or if it's just a handy conceit.
I prefer the rule where you must spend $30 million dollars in 30 days, but have no trace of the money left — yet still have received fair value for your spending — in order to get the inheritance.
You go to a bank to manufacture you a derivative on eg the stock market. The deal is that you pay them 30 million dollars now, and in 30 days they either pay you x dollars with probability p or you lose everything.
Eg they pay you 100 million dollars, if the S&P 500 index goes above, say, 5000 which they think will happen with probability of just under 30%.
If you do the math: the deal is fair.
If you lose the bet, you get your inheritance.
If you win the bet, you get your 100 million dollars from the bank, and presumably pay the 30 million dollars back (if that's a stipulation in the will).
You live in the place already but there are inheritance matters still waiting to be settled. Or you inherit 20% along with 4 other siblings, they don't want to sell but they won't contribute or live in the place. Or you might simply not have the money for the legal process to sell. The place might need work before you could even put it on the market but you don't have the money for it.
You can put things on the market, even if there's work to be done.
> Or you might simply not have the money for the legal process to sell.
If your property is valuable, someone will be willing do that work for you in return for a cut of the proceeds. (And if your property ain't valuable, then the original comment doesn't apply.)
If wealth were useable as a metric for poverty it would be used. It’s not. We define poverty based on income. Not because nobody has ever thought about it in the same lucid terms as yourself, nor is it because the prevailing ethnic group or class has selected their preferred definition and nobody can change it. Wealth that is not realized is sort of meaningless. Are the people of Venezuela wealthy? But they possesses all that oil. See the problem?
That's not true in most states in the US. Programs with means testing (TANF, Medicaid, and the like) don't consider you poor if you have assets.
You hear about this a lot when people require certain kinds of care that Medicaid covers but Medicare does not. People will sign over all their assets (real estate, cars, financial instruments) to their spouse, then get divorced. All because the government doesn't consider you poor if you have wealth.
Income isn’t perfect but it’s used for a reason. Think about the problems inherent in defining “wealth”. It’s too squishy a concept to use for policy reasons, or else they would. Is somebody who makes seven figures but spends it all on food, entertainment and travel really poor? No.
Except wealth is used for lots of policy. For example, financial aid at schools attempts to use wealth. Which is why they take into account equity in your home.
And if you have ten million in a trust and no income — are you poor?
I’m saying it’s not useful in policy as measurement of poverty. Poverty is and forever will be defined by income. Wealth is used in policy like everything else, yes of course. Tax policy is a great example. Is there anything that tax policy doesn’t have loopholes and special provisions for? I’d argue that wealthy people benefit from all that. Poor people benefit from clear and effective policies that use simpler, less game-able constructs. Getting into the business of trying to define nebulous hard to define constructs like wealth will benefit those with greater resources, always.
Let's say that the terms of a trust dictate that interest revenue be immediately paid out to a specific charity, but you are allowed to spend the principal. Are you poor?