It has been said that the only thing harder than being an addict is loving one. Having someone in your life who struggles with substance abuse is never easy, no matter the circumstances, the relationship, or their age. Estate planning often involves dealing with difficult situations. Putting off thinking about these decisions is not the solution. By delaying making plans for how best to care for an addicted loved one when you are no longer around, you risk losing an opportunity and control that can further complicate matters.
Estate Planning for Beneficiaries with Substance Abuse Issues. When considering including an addicted loved one in an estate plan, it is useful to remember that estate planning can be uniquely tailored to the needs of each family and individual. Here are some points to keep in mind as you try to fit a drug- or alcohol-dependent person into your plan:
- You do not have to disinherit them. While you may have concerns that any money or property you leave to an addict could not only be squandered but also contribute to their self-destruction, there are ways to provide them an inheritance that does not involve giving them direct access to it.
- Be cautious when relying on a sibling or relative to care for a family member experiencing addiction and manage an inheritance on their behalf.
Setting Up a Trust for an Addicted Loved One. A trust allows you to set the terms for how the beneficiaries may use and have access to trust funds. The terms can be as specific as you want and may include provisions specifically designed to tackle addiction. For example, the trust could include the following types of terms:
- The inheritance must be used to pay for treatment.
- There are incentives to ensure that the beneficiary gets the help they need.
- Distributions cannot be made until the beneficiary completes rehab, is able to pass a random drug test, or, in the case of a relapse, maintains sobriety for a period of time.
- If the specified incentives are not met by a certain deadline, the trust’s accounts and property will pass to a different beneficiary or a charity.
- Trust funds may be used to pay for living expenses since many addicts have accompanying money problems.
- The trust can last for years or even a lifetime or terminate upon full rehabilitation, at which point the beneficiary takes control of their inheritance.
Choose the Trustee Carefully. Selecting a trustee is just as crucial as the provisions of a trust created for a beneficiary who suffers from addiction. The trustee should be somebody who will act in the best interests of the beneficiary while striving to preserve family harmony.
You Are the Only One Who Can Protect Your Loved One. Without an estate plan, the unknowns can be greater—and more consequential. Your loved one may end up with a lump sum of money and no restrictions. To make a plan that provides addiction assistance for someone you care about, even after you have passed away, contact our office.