Did you hear what Bill Gates and Warren Buffett are doing with their estates when they die? Giving most of it away. And they've convinced many other billionaires to do the same thing through a movement called the Giving Pledge. They want to do good for the world -- and, as Buffett has famously said in the past, "I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing."

Buffett isn't alone in his concern about the impact of wealth on kids. Nearly 60 percent of parents believe their children are not well prepared to handle a financial inheritance, according to a study by U.S. trust. Few heirs become debauched Jay Gatsbys, throwing nightly drunken parties in the Hamptons, or souls troubled by gambling or substance abuse. And yet, there's a good reason for concern.

Related: 9 Must Have Status Symbols that Say "I'm Rich"

Experts say that much of family wealth is lost when it’s passed from the first to the second generation, and it’s nearly all wiped away by the third generation. Some of that may owe to most estates not being that large and the bulk of money going to purchasing a home or providing education. But often the reason is that heirs are unprepared to deal with sudden wealth.

"Older people today were once young themselves," says psychologist and registered investment adviser Phil DeMuth. "They think back and realize they didn't have a clue about money and how to handle it." Youth is unlikely to be any more resilient to divorce, unexpected problems with creditors, bad investment plans -- "all the things that can separate you from your money."

The answer, according to experts, is a trust that can help preserve wealth and allow it to still grow while still providing a benefit to heirs. A trust is a legal mechanism to hold assets on behalf of beneficiaries and transfer the wealth in a specific manner over a pre-determined time.

Related: How Young Millionaires Are Different than Their Parents

Because the assets are technically owned by the trust until transferred to the beneficiary, the structure provides protection from more than just careless habits. A divorce cannot involve the trust because it is not property of the beneficiaries. Similarly, the money is beyond the reach of a debt collector.

A trustee or trustees—often family members--administer the plan, regularly reporting financial results to the beneficiaries, filing taxes, and retaining professional financial and legal help. "I think it makes a lot of sense to pick two trustees--one that would be [an administrative trustee] for the children and one that would be a fiduciary for the money and have them meet to discuss how to invest," says Benjamin Brandt, a financial consultant in Bismark, ND. If you think the job would be too onerous for family members, you can appoint a professional trustee or institution to handle the job.