Contrary to popular belief, much of the way wealth is transferred to the next generation is less about inheriting vast amounts of money, than it is supporting children’s education (and grandchildren’s too), helping with the purchase of a home, or to get married. These three life events, says Fast Company in a recent article “5 lies you’ve been told about generational wealth” are at the real root of the ability to accumulate wealth.

Here are a few commonly held misconceptions about the beneficiaries of generational wealth:

Wealth lasts many generations. Yes, wealth can and does trickle down and set up future generations for success, but it’s harder to maintain across the generations than you’d think. About 70% of wealthy families lose their wealth by the second generation, and 90% of them do so by the third generation.

One reason could be that the generation that inherits the money may not be well-equipped to manage the money they inherit. However, it’s also that family wealth is diluted, as it is divided up among children, especially if each sibling has a different idea of what to do with their inheritance.

Some financial experts recommend that families create a mission statement, like any organization, to establish what their values and goals are.

Their parents talk to them about money. You might think that wealthy parents talk with their kids about money, how to manage it, how to invest it, etc. However, that’s not always the case. For some parents, the less said about the family wealth the better. They don’t want the children to know how much they might inherit, and don’t always offer guidance about how they should spend or invest their money.

Many reach their thirties, forties, or even fifties, with no clue as to how to handle money. Even people who work with the wealthy, are often surprised at their client’s lack of knowledge about finances or legal issues. Someone who saved a million dollars, may know more than someone who inherited tens of millions of dollars.

They know what to do with their money. Here’s a surprise: even people who work at hedge funds or in private equity don’t always know what to do with their money. They know about their area of expertise, but when it comes to paying for college or how to pass wealth down through the generations, they are just as likely to be in the dark as anyone else.

A big inheritance can also come with a lot of stress. Do you think that’s a problem you’d like to have? It may be. However, depending upon how their inheritance is structured, it may not be so easy. An inherited IRA requires annual distributions, which can wreak havoc on tax planning, if they don’t have good advisors. Trusts may come with restrictions on what can and cannot be done with the assets. If the money is lost through their actions, that’s a family affair.

They’re lazy and irresponsible about money. There’s a big difference between what we see in the headlines and what’s really happening in families with inherited wealth. While some rich children do flaunt and fritter away their wealth, many don’t. Children from wealthy families often receive excellent educations and want to make sure the family wealth does not end with them.

They spend their money differently than parents or grandparents. Most of us learn how to manage money and spending from our parents. It’s no different for wealthy people. However, those who built their own wealth tend to be more frugal—they feel lucky to have the assets they never expected to have. A wealthy kid might use family money to put a down payment on a home, but they are thoughtful about spending. For some people, receiving an inheritance may come with a sense of guilt to have so much more than others, or a responsibility to make sure they are good stewards of the family wealth.

Regardless of the size of the estate you are managing or hoping to pass down to your children, don’t neglect having an estate plan. That means sitting down with an estate planning attorney who can help you create a plan that will protect your family and your assets.

Reference: Fast Company (July 18, 2019) “5 lies you’ve been told about generational wealth”