I'll preface this by saying that I am firmly of the belief that removing permadeath from this game would be to rip out the heart and soul of it. When you play this game as a hermit or a small group of people (or arguably, in some cases, even a thriving village) achieving things in this game -means- something. If you could just get everything back after a death, it would be trivialized.
I'll echo the opinion that the PvP mongering is the driving problem behind the current system. The persistent wounds, ability to engage in combat on your own claim without skills to do so, these are good starts to deterring random slaughter and griefing, but ultimately it isn't enough. As a fairly casual player who plays with fairly casual players, I've seen the level of insane progress speed people are capable of in this game. I don't honestly think you can effectively penalize or deter griefers enough to help without making it incredibly unfair. If we weren't meant to murder each other, the option wouldn't exist in the game.
Instead of penalizing griefers, I think the better solution is to aid crafters and casuals. Right now, the system favors fighters. Kill a village, get their shit. Don't bother with fighting, you're going to die and lose it all.
What about a karma system, then?
Given that we can now engage others in combat on our own claims without the required skills, there is almost literally no reason to buy skills like Rage or Murder unless you plan to use them. So what if players who live like saints are rewarded in the afterlife, while players who live like Huns are rewarded on the mortal coil? It seems obvious to me that people who murder others and raid villages have plenty of benefits associated with their life choices. They feel braver outside their walls because they can fight, they can pillage and steal like raiding barbarians, they can have the warmongering they want. Non-combat hearthlings enjoy the benefits of crafting, creating, and enjoying a simpler life of creating high quality goods. Either can be taken away in an instant, but the non-combatants are undeniably at a massive advantage. So how about something like this:
Hearthlings begin with a pure karma score. This is a hidden value that the player is aware of only by mention, and has no visible representation. Hearthlings can live their entire existences and never lose a karma point if they so choose, but they can permanently lose karma if they decide to live on the edge. Purchasing skills like Rage, Theft and Tresspassing, committing acts of murder, assault, theft or trespassing, any action that breaches the hearthlaw causes the hearthling to lose karma. When a hearthling with no karma dies, their ancestor gets nothing save for presumably the leftover spoils of Attila Senior. Meanwhile, hearthlings with positive karma scores lend a percentage (albeit a reasonably low percentage) of their accumulated LP to their ancestor. The higher your karma, the better off your ancestor will be.
Having brought up the permadeath/inheritance topic before, I've read the responses and decided that I agree with the assessment that legacy was far too forgiving for death in terms of LP inherited. But what I've seen follow that point over and over is "it made warriors/griefers too strong because they could die and come back with almost everything."
Why should warriors come back with everything? They take things from others for a living. They presumably have a throne built of the skulls of their victims, pillaged goods from raided settlements, back-up plans and alts because really who does pvp in a permadeath game unless they're sure they've got less at stake than their victim?
Good little hearthlings who never did nobody no harm don't have a skull throne to leave their children. They have ashes and tears and nothing to show for the innocent lives they led.
Thoughts?