Many families in Orange County are forced to deal with the problems caused by drug and alcohol addiction. When creating an estate plan, it is important to take this issue into consideration. Parents who have adult children dealing with substance abuse issues can take certain steps to protect the child from receiving too large of an inheritance at one time, reducing the likelihood that the assets will be wasted and that the child can harm himself due to lack of control and access to money.
Estate Planning Options for Beneficiaries With Addiction Issues
While there are many different estate planning options that parents can utilize when an adult child is facing a substance abuse problem, following are six of the more common:
- Consider holding your child’s inheritance in trust for a longer period of time than your other beneficiaries. If desired, the assets can be held in trust during your child’s life and distributed to another beneficiary upon his passing. This can be done even if your other children will receive their shares outright when you die.
- Consider placing your child’s inheritance in trust with planned distributions, but give the trustee instructions about what to do if substance abuse is suspected.
- Avoid appointing a child with a suspected drug abuse problem as a trustee of the trust. You may also want to avoid naming the child’s sons or daughters. Instead, choose a neutral party to serve in this role.
- Set up conditions tied to distributing property to the beneficiary. For example, you can include provisions that allow the child to receive additional distributions upon reaching certain milestones.
- Consider creating a trust specifically for the affected child, and include provisions that allow the trustee to pay for certain services such as rehabilitation, counseling, and other forms of treatment.
- Encourage the adult child to execute an advanced medical directive and a financial power of attorney. This can make it easier for someone to step in if the child is unable to make decisions about health care or the financial well being of the child.
Substance abuse issues place a great deal of emotional and financial strain on families. We understand the struggle that you are facing and are here to help you create an estate plan that can alleviate some of your worries. View our client testimonials page today to learn more.