Most young parents know intuitively how they would want their assets divided in the event both would suddenly die, such as in an accident. Most parents would want the assets to be used to care for their children and then divided equally at age 21. It’s an easy choice if children are young.

As parents and children age, decisions about what should happen to one’s assets often become more complicated. If there has been a divorce or remarriage, the complications often multiply. Nearly all parents want their children to get along with and support each other (rather than compete with each other) and thus seek to foster a sense of camaraderie among them.

When Equal Seems Unfair or Unwise

The idea of a simple, even division among one’s children still sounds fair and equitable. Yet what if one child earns a six plus figure income, another is a single parent with a disabled child, another suffers from mental illness, has been in and out of drug rehab and has been receiving state aid that would be cut off if he were to inherit assets?

Clearly, as both parents and children age, and the amount of family assets increases, the scenario is often not as clear as it once was.

To Give or Not to Give

Yet another complication to throw into the mix: Parents often have very different views on how to and even whether to provide for their children. Some may see the potential inheritance as a way to give the kids a head-start, pay off student loans, help buy a house or to get set up in business.

Others may believe, as Andrew Carnegie and other mega-rich tycoons did, that a big inheritance stifles initiative. As Carnegie wrote in Advantages of Poverty in 1891, “the parent who leaves his son enormous wealth generally deadens the talents and energies of the son, and tempts him to lead a less useful and less worthy life than he otherwise would.”

In simpler terms, some parents want to provide a better life for their children while others worry that sudden infusion of assets will stifle their children’s drive and ambition.

Alternatives to the Even Split

Parents can always fall back on the instinctive impulse to divide the estate equally between children, but for those parents who believe other circumstances should be considered, some thoughtful, estate planning becomes important. Not surprisingly, some parents, guided by estate planning experts, have figured out some ways to ease the potential parental dilemma.

• Test the children to see how they handle money. One way to do this is to gift each child a certain amount ($18,000 a year now can be gifted to an individual without having an impact on one’s potential estate tax) and see how they handle the money. Do they bank it? Invest it? Use it to pay debts? Or splurge on a fancy wardrobe or new car? A parent can often use the results as a teaching opportunity.
• Establish an incentive trust. There are no strict rules for how to do this, but the basic idea is to encourage certain behaviors–maybe educational achievements or wise money management–and discourage others–drug use as an example. To accomplish this, the trust might agree to match a percentage of whatever a child earns in a year, whether that’s the $70,000 one child earns or the $2,000 that another earns. Another often used approach is to reward high grades, or earning a college or graduate degree, or successfully landing and performing a job.
• A trust can also be set up to distribute funds incrementally, starting with lesser amounts when children are young and gradually increasing amounts to age 35 or 40 when, presumably, the heirs have learned how to handle money.

Some parents might decide not to leave any meaningful amount of money to their heirs and instead leave it to one or more charities. If that’s the case, the parents might want that intention known to their children as part of an estate plan.

Or the inheritance can remain in its easiest, equitable form, much as it was when both parents and children were young: Equitable, ethical and evenly split.

(The article has been updated since it originally published in May, 2016.)