What about the idea of dividing the inheritance but putting the share of the one who is OTD in a trust with clear stipulations as to what type of lifestyle over how long a period of time would free the money to him? Or what about leaving it in a trust to be divided amngst HIS cghildren if they become Shomrei Torah Umitzvos?
RE: Cutting off- The one who is OTD did the cutting,not the parent who does not want to give a big yerusha. We can love the child or adult who has dumped our lifestyle, beliefs, tradition and history a deeep and real love, but we need not approve of their chosen lifestyle and if the de facto result of THEM cutting the string is a loss of inheritance, who did the cutting?
BTW, if one goes too far, are you aware that parents may be obligated to sit Shiva?? Obviously Halcha feels that at some point cutting ties is really pretty serious business.