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How to Plan for a Family Member Struggling With Drug Addiction

Nov. 9, 2021

Parents are often faced with an agonizing decision when their child is struggling with drug addiction: do they cut them out of the will?

It's a hard question to answer. On one hand, parents want their children to feel loved and cared for even if they can't be involved in family matters. But on the other hand, there is no guarantee that loved ones with addiction who inherit assets will use them responsibly.

This post explores two ways parents can help a child struggling with drug addiction with proper estate planning.

Conditional Trusts

A conditional trust makes estate assets available to a loved one only after they have met certain conditions. For instance, you could set a requirement that your child will only receive funds once they have completed rehab and remained clean for a designated period of time.

Conditional trusts payout money according to the beneficiary's progress, and you can establish continuous objectives to ensure that your kid stays dry.

Spendthrift Trusts

A spendthrift trust gives spending power to a trustee you designate, who can keep your loved one from squandering money or using it to feed their addiction. Spendthrift provisions in trusts are also important because they allow you to provide for essential items like child support, alimony, food, shelter, and other necessities without giving your beneficiary unlimited access to money.

Spendthrift provisions are typically used to shield trust funds from creditors. Creditors are unable to reach the trust assets if your child has to declare bankruptcy or accumulates large debts as a result of poor financial decisions.

Finally, these trusts can help your child qualify for government assistance like Medicaid, housing, or SNAP, while still offering the supplemental benefits of the trust - letting you provide assistance even after you have passed away.

My Office Can Help You Plan for Life’s Difficult Choices

Estate planning for an addicted child can be emotionally and mentally difficult because you likely do not want to disown your child. However, as a responsible parent, you likely want to ensure that any inheritance your child receives is not made available to them until they are clean and sober.

If you would like to learn more about setting up a plan that can protect a loved one struggling with addiction, contact my office for a free strategy session.

Parenting Tip:

Make Communication a Priority! Communication is key in any form of relationship, especially one between parent and child. Keeping the channels of communication open when your child is young (and talking things through) will take a lot of weight off your shoulders when your child reaches their challenging teen years.