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Essential Estate Planning Tips for Loved Ones Struggling with Addiction

Posted by Gregory Robinson | Jul 23, 2024 | 0 Comments

The Challenge of Loving Someone with an Addiction

Loving someone with an addiction is incredibly challenging. It's especially tough for parents to watch their children, whom they once had high hopes for, struggle with substance abuse. Regardless of the circumstances, relationship, or age, having someone in your life who battles addiction is never easy.

Importance of Estate Planning for Addicted Loved Ones

Estate planning often involves making tough decisions and putting them off can complicate matters further. By proactively planning how to care for an addicted loved one, you can maintain control and ensure their well-being even after you're gone.

How to Best Help Someone Struggling with Substance Abuse

In 2022, approximately 17% of Americans aged 12 and older had a substance use disorder, according to the National Survey on Drug Use and Health. This includes 29.5 million with an alcohol use disorder and 27.2 million with a drug use disorder.

Despite these statistics, most people with addiction recover and lead healthy lives. Treatment and recovery services are crucial, and financial barriers often prevent people from accessing these services. Family members might want to provide support but worry about the impact.

Estate Planning for Beneficiaries with Substance Abuse Issues

There isn't a one-size-fits-all solution for assisting a loved one with substance abuse. While you can't force someone to undergo treatment, you can create an estate plan tailored to their needs. Here are some considerations:

  • Avoid Disinheritance: You don't have to disinherit an addicted loved one. There are ways to provide an inheritance without giving direct access.
  • Be Cautious with Family Caregivers: Relying on a sibling or relative to manage an inheritance for an addict can create family discord.
  • Guardian for Underage Children: Name a guardian to manage finances for an underage child battling addiction, but consider a trust for long-term support.

Setting Up a Trust for an Addicted Loved One

A trust can help ensure that an inheritance benefits an addicted loved one without enabling harmful behavior. Here's how to structure it:

  • Tailored Instructions: Set specific terms for how the trust funds can be used, such as paying for treatment or meeting sobriety milestones.
  • Incentives: Include incentives to encourage treatment and recovery.
  • Protection of Funds: Specify that funds can only be used for living expenses or treatment and may pass to another beneficiary if the addict doesn't meet conditions.
  • Longevity: The trust can last for years or even a lifetime, terminating upon full rehabilitation.

Choosing the Right Trustee

Selecting the right trustee is crucial. Consider the following:

  • Trustee Authority: The trustee can have full discretion over fund distribution.
  • Guidance: Provide guidance for managing funds, including paying third parties directly.
  • Communication: Allow the trustee to coordinate with family members regarding treatment.
  • Professional Trustees: Consider a professional trustee to maintain family harmony. Backup trustees should also be named.

Consequences of Not Planning

Without an estate plan, the court will distribute your assets according to state law, which may not address your loved one's addiction. They could end up with unrestricted access to a lump sum, exacerbating their issues.

Discuss Estate Planning Strategies for Addicted Beneficiaries

Balancing the desire to help an addicted loved one with ensuring your assets are used wisely is tough. If you want to create a plan that provides support and assistance for a loved one struggling with addiction, even after you're gone, contact our estate planning attorneys.

About the Author

Gregory Robinson

Attorney Gregory Robinson is a native of Alabama. He earned his Juris Doctor (J.D.) degree from Mitchell Hamline School of Law and holds a Master of Business Administration (MBA) degree from Rice University. Prior to practicing law, he worked as a strategy consultant in the financial industry...

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