After two decades of experience working in the area of estate and generational planning, I can say with confidence that there are many myths and consistent mistakes that are being made which prevent the creation and perpetuation of wealth from occurring.


Myth: It ties money up that I need to live on.

Mistake: People will dismiss the idea of generational planning with this limiting belief without learning more about how a plan actually works.

Reality: Many of the plan designs we use allow for access to cash throughout the giver’s lifetime.

Myth: Estate Planning is only for the wealthy.

Mistake: People often forego any legal preparations with this line of reasoning without understanding the problems they are creating for themselves and their family.

Reality: Estate planning is beneficial for anyone who has children or liquid assets over $250,000.

Myth: I am too old or too young to be thinking about this.

Mistake: People will sometimes base their decision to do nothing on their personal limiting beliefs.

Reality: Generational planning is not about age. Anyone, young or old, who has the right mindset can be a catalyst for generational planning.

Myth: All I need are Transfer on Death (TOD) or Payable on Death (POD) on property titles or beneficiary designations on retirement accounts or insurance policies.

Mistake: People often believe that these designations are sufficient to pass their estate from themselves to someone else at their death. In many cases, this is an effort to avoid the expense of an attorney.

Reality: A TOD or POD designation only transfers the asset from one person to another, which is the primary problem with the status quo of wealth transfer. This mindset often leads to consumption.

Myth: My kids will know what to do.

Mistake: People will sometimes think because their children have a good education or job that it qualifies them to be a financial expert and know what to do.

Reality: A good education or successful career does not mean they know and understand financial or generational planning.

Myth: This is more of an opinion than it is a myth, but some people have a belief that their assets and wishes are private and are not anyone’s business.

Mistake: While it is true they are your assets and are private, this mindset has proven, time after time, to cause problems within families.

Reality: I have had clients in my office on many occasions in tears over the fact their parents will not communicate anything with them. They are given no guidance and have to wait until their parent’s death to learn what is going on.

Myth: Having a charity as a beneficiary disinherits my kids.

Mistake: Frequently, people neglect to leave money to their church or favorite charity believing any asset which goes to the charity is one less asset that goes to their kids.

Reality: The fact is that by utilizing life insurance and charitable trusts, often MORE money can be left to the children while giving money to the charity. Think about this: when working with charities, you have tax advantages which cut the IRS out as a beneficiary. This is more money to distribute to people and causes you care about.

Myth: This is another mindset which is more of an opinion than it is a myth but is worth, mentioning. There are some who gift assets to their children each year with the goal of helping their kids out while they are alive.

Mistake: This approach can drastically reduce the potential size of an estate and the transfer of assets from one generation to the next. While the idea behind this gift is to avoid estate taxes, it is not efficient and should only be considered after speaking with qualified professionals.

Reality: By using a specially designed life insurance policy, you have the ability to offer gifts to your children while simultaneously creating a tax-free death benefit. When you give money directly to your kids, you are potentially missing out on passing hundreds if not millions of dollars to your kids.

Myth: I already have a will and/or a trust.

Mistake: What we have found is that much of the legal work prepared simply distributes assets to their children and often does not resemble a generational plan.

Reality: Basic legal work simply passes money to the kids. This approach leaves the assets susceptible to consumption and leaves nothing for the next generation.

Myth: The life insurance I have is sufficient.

Mistake: Assuming the life insurance you have is sufficient to satisfy your plans is risky. The type, funding strategy, and duration of the policy all play a role in the viability or efficiency of the policy.

Reality: After careful review, we often find policies that were either not what the client thought they were or are simply a poorly designed contract. We have had clients bring us policies they thought were paid for when in fact, after review, were on pace to lapse within a few short years.

Anyone can come up with excuses for why this won’t work or why it is not right for their family. However, your family is looking to you for guidance and leadership. How you think and what you do will impact your family for generations. The question is, what are you going to do about it?

Our process enables our clients to make decisions today, which will work toward satisfying their current and future financial needs while simultaneously maximizing the transfer of assets and ideas to the next generation. We work with clients to get them thinking beyond their situation and to think in terms of their legacy.


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