Generational wealth is a facet of wealth management that is often misunderstood. Labeled trust fund babies, rich kids, and lucky breaks, those who receive an inheritance from families are rare. That inheritance is often accompanied by preconceived notions from those who don't understand generational wealth. According to recent statistics, almost 70% of Baby Boomers do not expect to receive any form of inheritance. Only 27% of their generation has or will expect to see a collective $10 billion passed down over the next 40 years. The average inheritance amount is less than $50,000, while generations prior could expect over $100,000 per person. 

Generational wealth is a curious aspect of modern financial history. With fewer than a third of all Americans expecting or receiving money from family members, there are many misconceptions regarding generational wealth. 

Below are five of the most commonly propagated myths about generational wealth.

1. Generational Wealth Lasts Forever

Some people believe that wealthy families continue to be rich forever and may even become richer over time. However, this is rarely the case. If modern statistics are to be believed, lasting wealth is a fading possibility.

No, the rich do not always get richer. At least, not according to recent numbers. Almost 70% of rich or wealthy families are lined up to lose their money by the second generation. 90% of these families will lose it all by the third generation. In other words, it is very rare that generational wealth remains large over time. This is due to a number of factors, notably poor financial education, training and management. The vast majority of funds are lost through inheritance splits. As more children, grandchildren, and loved ones enter the picture, generational wealth is separated into smaller and smaller portions.  Money continues to flow between family members, and wealth is eventually reduced from its former size.

2. Rich People Are Stellar Money Managers

You might be tempted to think that generational wealth is a product of highly intelligent elites, but this is simply another common and misleading financial myth. Often, those who inherit funds have little or limited financial literacy.

As with many aspects of the finance world, proper money management comes from parental training, peers or a financial advisor. The lack of these resources understanding of inherited funds and potential growth.

3. Generational Wealth Comes with Financial Education

It's easy to assume that generational wealth is accompanied by financial education, but this is not always the case. People who inherit large amounts of money do not always receive training in financial literacy. They may not be in a position to manage money alone, and they feel as though they are inept to consider all its factors.

Those who receive vast sums of money may find themselves stressed and concerned about the future of their funds. These families may be worried about their ability to understand money and be reluctant to ask for help from a reputable wealth advisor. The best plan for lasting wealth is to move forward with confidence undaunted by seeking out answers to the difficult questions that accompany a sudden inheritance.

4. Wealthy Folks Are Spoiled or Lazy

In today's landscape, the majority of wealthy families are first-generation rich, meaning they built their finances through hard work, planning and dedication. Research indicates that these families rarely if ever inherit money or make risky investments. They are almost entirely self-made. Millionaires who maintain their wealth invest a great deal of time calculating, weighing and determining the correct path of their investments.

5. Spending Always Differs from Person to Person

Many Americans believe that generational wealth is spent differently by different owners and that those who inherit may choose an alternative spending pattern from parents or family members. However, many of those who inherit large sums of money attempt to emulate or copy the actions of their parents. Some may feel guilty for having the money and try their best to spend in a way that would honor their benefactors.

Thane Stenner, owner of Stenner Wealth Partners, has decades of experience managing and providing insight into generational wealth. As the author of True Wealth: An Expert Guide for High-Net-Worth Individuals (and Their Advisors), Stenner has assisted dozens of high-wealth clients with the management of their funds. "As with any sudden financial windfall or influx of wealth," he said recently, "it is vital to understand how your wealth can work for you and the roadblocks to properly managing it. Your financial legacy is dependent on sound investment, competent oversight, and an understanding of the dynamics of a high-net-worth portfolio."

What is understood about generational wealth is often overshadowed by the myths and misnomers we attribute to the idea of an inheritance. In believing you understand the dynamics of generational wealth without fully accounting for its complexity, you are at risk for financial loss on a large scale. Identify the professionals who understand your unique high-net-worth portfolio needs and can provide the education and oversight that leads to successful management of your inheritance.