Avoiding 'sudden wealth syndrome'
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But incentive trusts are controversial because, like money for grades, they attempt to achieve a result through external, rather than internal, motivation. Worse, they can be used to impose the will of an overbearing parent on a young heir's life.

"If you have not instilled virtue in your children during your lifetime, how can you expect a trust to accomplish for you what you didn't do yourself?" says Jon Gallo. "I think the estate planning profession has always viewed incentive trusts with some skepticism."

O'Neill disagrees: "Incentive trusts aren't all bad if they're used in a broader sense like education or artistic endeavors. If they're used in the service of the young person's purpose, they're fine. But if they're used in the service of the father's idea of what the young person should do, they can have a negative impact."

Another technique is to set annual payouts of interest with release of principal tied to age milestones.

"I advocate that young folks don't get any principal until they're at least 30," says O'Neill. "Then, depending on the amount of the principal, maybe give them a quarter to a half of the principal at 30, another quarter at 35, another quarter at 40 and the remainder at 50 or so. Some of it really is just life experience and growing up."

All parties agree that the biggest single step parents can take to ensure a healthy inheritance is to talk about it with your heirs now, while you're still around to advise them.

Agather says JP Morgan's Next Generation Leadership Program routinely holds seminars to prepare clients up to age 35 to be good custodians of the wealth that will eventually befall them. In the tax bracket of the superwealthy, failure to plan can amount to a hefty loss of assets to taxes.

"The key to all of this is communication," she says. "Families that won't talk about this on a regular basis need that push. In the past, parents have dealt with this by not talking about it, but that is not an option anymore because you could lose 50 percent of it to the government just by not planning."

Start early with educational money games. Include the kids in planning the family's charitable giving. Coach teens on how to manage their money. Anything and everything you can do to raise money-savvy kids will pay big dividends when it comes time for them to inherit wealth. Open discussions about money can go a long way toward demystifying it and removing the fear.

"It's teaching them the difference between self-worth and net worth," says Jon Gallo. "It is extremely important that kids learn there are other uses for money besides me. When you start dealing with your children and money from the viewpoint of love rather than fear or control, you'll find it much, much easier to do estate planning. It's 'What can I do to help you?' not 'What am I going to do that's going to harm you?'"