Dealing with drug addiction in your family is often complex. This is especially true when it comes to estate planning. Many parents are wary of providing an inheritance to a child with an addiction, which can be a great source of conflict between family members when it comes to creating an estate plan. WealthManagement.com offers the following insight in this case, which can help you create a solid estate plan that doesn’t harm those you love who are struggling.
A discretionary trust gives you greater control of estate planning. You choose a trustee, who will oversee money placed in the trust and how it’s distributed after you’re gone. In this case, the trustee can withhold funds if the addict is not actively getting help for his or her addiction. On the other hand, if the addict is interested in receiving help or has recovered, the trustee is free to disperse funds.
Providing the inheritance to a sibling
You can also leave an inheritance to a sibling to be provided to the addict. Having another party in control of the money prevents it from being squandered on drugs, which is a very likely concern when leaving money to a person with an active drug problem. When using this option, make sure the person holding the money is forthright and willing to adhere to your wishes. There is a risk that money could be appropriated, which would deprive the beneficiary of financial assistance.
This option is quite difficult to consider. After all, parents may feel as though they’re abandoning their child to their addiction, which can be extremely traumatic. However, many people choose to disinherit adult children with addictions after providing money for numerous rehabilitation efforts that continually go nowhere. If you’re considering disinheriting a beneficiary due to an addiction, it’s best to consult with an attorney to ensure your estate remains protected.