AARP released a study a few years ago, that revealed one in five people receiving an inheritance battled over it with other family members. But, it doesn’t have to be that way, if the person passing on the inheritance follows a few sensible ideas.

Last month’s column addressed the need for a will. But the plan doesn’t end there. Once you have a will, you need to take additional steps.

Plan. Don’t just leave everything to your heirs in a pile and let them sort it out. That’s how fights start, and it won’t endear you to their memories. Organize your financial records to make it easier for your heirs to sort out your estate. Put an estate plan in place with an up-to-date will, trusts (if necessary), life insurance, probate directions and other strategies. This not only can minimize the estate tax bite, it will ensure that your estate is divided as you wish. For example, you might want to use a trust to ensure that part of your estate goes to your children from a previous marriage.

Don’t be secretive. Probably nothing breeds more animosity – not only among heirs but between heirs and their benefactor – than keeping an estate plan secret. After you’ve drawn up a plan, consider talking it over with your heirs. Explain to them why you’ve made certain decisions. Listen to their feedback. You may want to make adjustments before executing the documents.

This can be a good time to talk about who gets (or wants) certain items, particularly heirlooms or memorabilia. According to the AARP survey, most major battles among heirs is over these items. Outline your decisions in a letter of instruction that accompanies the will, explaining who should receive specific items.

Be equitable, not equal. Dividing your estate evenly often is the worst thing to do, especially if it involves undividable property such as the family farm, land or a second home. It’s better to be equitable or fair, but not equal.

Take a family farm, for example. It’s hard enough to keep it going into a second generation without the added burden of splitting it equally among multiple heirs. Some of them may not want to be involved in the enterprise, may not be qualified to run it or will battle each other for control. Usually it’s better to designate one heir to succeed as owner, preferably someone you’ve groomed or who has a strong interest in the business. Then compensate the other heirs with insurance proceeds, assets such as stock, additional cash or other liquid assets.

The same principle applies to a family’s cottage or lake home, where heirs may squabble over its management and use. Passing the home on to one heir, but providing equitable compensation to the others, may alleviate friction.

Even if easily divided financial assets such as stock make up the estate, there may be other reasons to pass on the estate unequally. Perhaps a child is disabled and will need lifetime care, or one child is already wealthy while the other is working hard but in a lower paying job. Perhaps one child spent time caring for an ill parent and deserves extra. Explaining what you intend to do and why will likely make it easier for all to accept.

Don’t disinherit. It’s not uncommon for parents and children to feud to the point where a parent cuts a child out of an inheritance. You may worry that the adult child won’t be able to handle an inheritance due to psychological or other problems, or a wasteful habit with money. Such concerns often can be overcome with the use of trusts stipulating at what age the child receives the money or under what conditions, such as he or she has to graduate from college first. Simply cutting them out of a will can provoke ill feelings not only toward you but toward those who inherited.

Understand the psychology of inheritance. It may sound strange, but not everyone is comfortable receiving an inheritance, especially a large one. Heirs not well prepared for an inheritance may experience a sense of guilt because they didn’t “earn” the money or are anxious about how to manage the inheritance. That can cause tension among multiple heirs. Again, discussing the inheritance in advance will help. Linking them up with professional advice also can help ease discomfort.  

This column is produced by Financial Planning Associates, and is provided by R. Hutton Cobb, a Wachovia Securities financial advisor in Greenville, N.C.