In the past, did you think alcoholism only happens to other families? If so, you are not alone. This disease has reached epidemic proportions in the United States and California. In fact, according to the National Institute on Alcohol Abuse and Alcoholism, an estimated 17 million Americans suffers from an alcohol use disorder of some kind. If you find that your child is suffering from an addiction to alcohol, it is important to update your estate plan—especially your trust.
What You Can Do to Protect Your Child and Your Assets
Why is an update so important when a child is struggling with an addiction? The trust assets could be wasted if the child is spending the money on drugs or alcohol. Similarly, the child could harm himself as a result of having increased access to these substances thanks to the money he receives. Fortunately, you can update your trust to protect both your child and the assets. Following are some suggestions:
- Modify your trust to hold all of the child’s inheritance in trust until he passes away. At that time, consider distributing the assets to another beneficiary, such as your grandchildren.
- Modify your trust to allow your trustee to withhold distributions to the child at any time if the trustee has reason to believe that the child has relapsed.
- Modify your trust to create incentives for your child to pursue treatment. For example, you can instruct the trust to pay for rehabilitation services or therapy.
- Modify your trust to stretch your child’s distributions of trust assets over a long period of time. For example, the first distribution could occur at age 40, with later distributions occurring in the child’s 50’s and even 60’s.
- Modify your trust to remove the child as a beneficiary. In many cases, this is not ideal; however, it is important to note that it is an option if the parent is concerned about leaving assets to a child struggling with addiction.
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