Planning for substance abuse issues
More people that you think have a connection to someone with a substance abuse or addiction issue. It is estimated that about 8% of All Americans age 12 or older have a need for treatment with regard to drug or alcohol abuse. This can present a many issues when putting together an estate plan. I recently have worked with a few clients for whom this is an issue.
One lovely client has recently divorced her spouse. The spouse has alcohol and gambling issues. They have three young children and the concern for my client is that none of her money goes directly to the hands of the addicted ex-spouse. We established a trust under her will to provide for her children in the event of her death. If expenses that are to be covered by her estate the trust requires that the ex-spouse present receipts for expenditures on behalf of the children before funds being disbursed. The Trust also requires any distributions for housing or education be paid directly to the landlord, mortgage company or the educational institution. When the children turn 18 or are no longer living with the former spouse the restrictions lighten up.
Another client is a couple with two adult children, one is a healthy 30 year old and the other child is a 35 year old adult who has a history of making poor life and money choices and is an active alcoholic. The concern for this client is not to punish the child, but to keep money out of his hands to prevent himself from having additional means to harm himself. When both parents have passed, they will pay for his rent, utilities and medical treatment or rehab should he choose. If he maintains a year of sobriety and maintains steady employment the restrictions on distributions will be altered to allow him to obtain more assets from the trust. If he relapses, the restrictions are reinstated.
Other things to address are the issue of who will be the trustee for a trust when there is either a beneficiary of third party involved with substance abuse issues. Do you want to have a sibling of the person in this position? Is there resentment between the siblings based on the addictions? Will it cause more friction? Will it bring the siblings closer together? Do you want to use a bank or other commercial or professional trustee or trust department as Trustee? This is an alternative that can be used to give to help keep the family peace. Ho to provide for the addicted person without enabling them? What to do if the addicted person recovers from that addiction? if they relapse? What to do if children are involved? What if the addicted person passes away? An estate planning attorney can help you with sensitive and creative ways to assist with these issues. Please call us to assist you in addressing substance abuse issues in your planning.