Add cash flows

Last updated: April 17, 2026

Luminary makes it easy for users to add different cash flows, like income or mortgage payments, to a household. Cash flows are factored into all Estate Waterfalls, cannot be altered between different Waterfalls, and impact the growth projections of an entity over time.

When to Model a Cash flow

Model cash flows to simulate income or expenses that a client, trust, or entity receives in all situations. For example:

  • You would like to include the impact of a large windfall, such as selling a home, on a family’s Estate Plan

  • You would like to include the impact of living expenses on family’s net worth over time

Do not model a cash flow if:

  • You would like to vary the amount transferred across Waterfall scenarios. To do this, using Hypothetical Waterfall transfers.

    • Common uses for hypothetical transfers include: modeling different sizes of business sale proceeds, modeling gifts to individuals, etc.

    • Learn more: 📄 About Hypotheticals

  • You would like to model investment income by asset class. To do this, check out Growth Projections.

Getting Started

To model a cash flow, go to the Cash Flows tab. Here, you’ll see any inflows or outflows already created for the client.

To add a new cash flow, click Add Cash Flow in the upper right corner and complete the details:

  • Name the cash flow (e.g., Jane Doe’s Annual Income)

  • Select the client or entity

    • Note: when you model an expense on an individual, it only sources the funds from the directly held business interests; to model an expense from an individual’s estate, select an entity such as their personal account or revocable trust. See FAQs below.

  • Specify whether it’s income or an expense

    • Note: All income should be entered in after-tax terms as Luminary does not calculate income tax on cash flows.

  • Enter the net amount of the cash flow

  • Indicate if it’s a one-time or recurring flow:

    • For a one-time cash flow, specify the year it occurs.

    • For a recurring cash flow, provide the start year, end year, and growth rate (if applicable). You can also set it to continue until the death of one or both clients in the household.

      • The death year(s) will be based on the death years you have modeled in each Estate Waterfall.

This simple process ensures all cash flows are accurately modeled and incorporated into your client's financial projections.

FAQs

What if I’ve associated a cash flow with a client instead of an entity?

When you attribute a cash flow to a client, it will only apply to business entities that the client directly owns. If the client doesn’t have any directly owned business entities, the cash flow won’t factor into long-term estate projections or growth calculations.

To ensure cash flows are fully modeled, we recommend assigning them to an entity, such as a personal account or trust, if the client doesn’t own any business entities directly. This ensures the cash flow is properly included in the estate waterfall and growth projections.

What happens if the entity I have associated an expense with runs out of money?

If a cash flow brings an entity value to zero, the cashflow will deplete the entity’s value to zero. Cash flows cannot bring an entity’s value below zero.