Estate Planning When A Child Has Substance Abuse Issues

Cindy and Bill have raised four great kids and they have a close-knit family. Lately, however, the situation is far from picture-perfect with one of their children, Tony. Following a surgery, he became addicted to the pain killers that were prescribed for him, and Tony fell into a substance abuse problem that he continues to deal with. Cindy, Bill and their other children are trying to get Tony the help and support he needs. Meanwhile, Cindy and Bill found themselves struggling with how to treat Tony in their estate plans, torn between a desire to take care of their children while not wanting to feed Tony’s addiction.

One solution can be to provide for the beneficiary or child through a trust, subject to certain restrictions so that the individual doesn’t just get the money to do with it whatever they please. A trustee in place or a third party will make sure that the assets are not dissipated or used for improper purposes.

This way, the trust is limited to taking care of a beneficiary or child’s health, welfare, housing, or education as appropriate. The assets will be preserved, rather than provided directly to someone who is not capable of responsibly handling them.

Generally, there must be a deposit of certain money, investments, or other assets into the trust. Then all requests and payments can flow through the designated trustee, so they only are made for treatment or support, and then directly to the provider.

That way, the beneficiary does not have the ability to get to the assets directly, nor to handle any payments. Instead, the assets are used to cover their needs.

What happens once they get the help they need?

Let’s go back to the example of Tony, the troubled child of Cindy and Bill. He’s now gone through a treatment program successfully and after quite some time, it’s clear that he’s put this painful chapter of his life behind him. He’s living a healthier life. With this in mind, can he now get a different portion as outlined in the estate plan as his life has changed for the better? It depends on how the trust is structured.

Addictions are strong. It’s good to have certain options in your estate plan to protect against a relapse. If they have completed treatment and made a recovery, the question becomes whether the trust should continue as is, be distributed in whole or in part, or whether any terms should be changed. That depends on what the trust allows, as well as the inclination of the trustee based on the progress made by the beneficiary.

While a trust can act as a restrictive mechanism for the protection of the assets as well as the beneficiary, a trust also is a vehicle that can provide some hope, by making sure that there will be some ongoing support for the beneficiary during post-treatment recovery. When set up in this manner, it may alleviate the stress of re-entry into a normal routine.

If you’re seeking answers during the estate planning process of how to account for a family member struggling with an addiction or simply financial mismanagement, making a plan to account for them while reflecting your wishes is very possible. Talk to Windy City Legal to learn how to make it possible.