Estate Plan Considerations When a Loved One Has an Addiction

When our children are born, we all have hopes and dreams for their future, Will they become a doctor? A teacher? A famous musician? Unfortunately, this is not always the case. Many people struggle with different forms of addictions. Having a child addicted to drugs is no parent’s desire, but sadly – it happens. We are experiencing an opioid epidemic leading to families having to make difficult decisions about how to provide for their child struggling with addiction in their estate planning. They don’t want to enable their loved one’s addiction, but they also don’t want to disinherit them either. Fortunately, there are options in between these two extremes.

A Last Will and Testament often provides a lump sum distribution to its beneficiaries, which is risky if the Beneficiary has an addiction. A better option is to establish a Trust with clear requirements that must be met to receive a distribution, i.e., incentivizing the Beneficiary to work toward overcoming the addiction. For example, the Beneficiary could use the Trust funds for addiction recovery, such as inpatient or outpatient care, therapy sessions, medication, or other related uses. The Trustee would pay the bills directly to avoid the Beneficiary diverting the funds for other purposes.

Once the Beneficiary has been clean for a specified amount of time, they could begin receiving small distributions if they pass a drug test and provide evidence that they regularly attend drug counseling.

As an additional safeguard, if the Beneficiary meets the requirements for a distribution, the Trust could require that the Beneficiary use the funds for specific purposes, such as paying rent/mortgage, healthcare bills, utility bills, or other essential needs. To ensure that the funds are used for their intended purpose, the Trust could pay the bills directly, rather than providing the Beneficiary with the funds to pay them.

The Trust would be administered by a Trustee with the authority to distribute or withhold funds based upon the Beneficiary meeting the requirements for a distribution. It is essential that the appointed Trustee is emotionally strong enough to avoid the Beneficiary manipulating them into a distribution, as can happen when addiction is involved. For this reason, it may be wise to name a professional Trustee, such as an attorney or a drug counselor, as a co-Trustee.

The Trust can also be established to provide for the addicted person’s children, keeping the assets in the family and providing for future generations, while avoiding enabling the person with the addiction.

Creating an estate plan that includes a person with an addiction is more complex than a typical estate plan. By working with an experienced Trusts and Estates law firm like Huth, Pratt, and Milhauser, you can feel confident that both your loved one, and your assets, will be protected. Call us today to learn how we can help you.

Huth, Pratt and Milhauser

Huth, Pratt and Milhauser is a boutique law firm that offers a wide range of legal services in the specialty areas of wills, trusts, estates, probate, guardianship, and related matters. The range of legal services that Huth, Pratt & Milhauser provides in these specialty areas includes planning, administration and litigation. The experience and skills of our attorneys and staff, coupled with our knowledge of applicable law, enable us to provide outstanding representation to our clients.

Although we are located in South Florida, we proudly serve clients throughout the country and around the world from our Boca Raton offices. We strive to provide superior and focused counsel in a timely manner and at a competitive price.

2500 North Military Trail, Suite 460
Boca Raton, Florida   33431
Phone: 561-392-1800

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