Even though the vast majority of people are familiar with the detrimental effects of illegal substances and alcohol, there are millions of Americans with substance abuse problems. It is even more heartbreaking and devastating when it is your child who falls prey to substance abuse.
Your child’s drug or alcohol abuse problem is definitely something worth taking into consideration when creating a trust or other estate planning documents. While many parents often choose to disinherit the child who has a substance abuse problem or postpone estate planning, hoping their child will be able to overcome the problem, there may be better alternatives.
If you want to create a trust but your child has a substance abuse problem, you might want to consult with an experienced attorney to provide you with qualified and tailored advice for your specific case. David Bale is an estate planning attorney in Westerville, Ohio, who helps clients achieve their goals in the best way possible. The Law Office of David G. Bale also provides legal counsel to clients in New Albany, Worthington, and other parts of Franklin and Delaware counties.
Possible Inheritance Concerns for a Child With an Addiction
Having a child with a substance abuse problem may require you to take certain things into consideration to protect your legacy and ensure your child’s well-being in the long run. There are several possible concerns related to leaving an inheritance for a child with a drug or alcohol problem:
- They may use the funds to buy more drugs or alcohol. Unfortunately, people with substance abuse problems do not fully control their actions. Their actions are often driven by the addiction, which means it is likely that a person with a drug or alcohol problem may use the inherited funds to buy even more drugs or alcohol, worsening their addiction.
- They may sell the assets for money for drugs or alcohol. If a person with a substance abuse problem inherits a house or another asset, there would be nothing stopping them from selling the asset to get money to feed their addiction. This is likely not something you want to happen to the assets you worked so hard for during your life.
- The risk of overdose. If your child with a substance abuse problem sells the assets or uses the funds to overindulge in their drug/alcohol intake, there is a higher risk of overdose, which is not something you want to happen to your child.
- Problems with creditors. If your child currently has problems with debts (of which you may or may not be aware), receiving an inheritance could make them easy prey for creditor claims or lawsuits. Depending on the type and amount of debt, creditors could eventually take away the inherited funds or assets.
By now, you may be thinking, “Okay, it looks like disinheriting my child seems like the only option left.” However, that is not the case. There may be other options available when creating an estate plan when you have children with substance abuse problems.
What Are Your Options?
If you have a child with a substance abuse problem, you may be looking for ways to ensure that your money is used responsibly. One option is a spendthrift trust, which places restrictions on how and when the trust’s money can be accessed. A spendthrift trust provides you with peace of mind by guaranteeing that the funds are not misused or spent frivolously.
Spendthrift Trusts and How They Work
A spendthrift trust is an instrument used in estate planning that allows you to protect certain assets from being squandered away by your beneficiary. The trustee appointed by the court is responsible for managing the trust fund and making sure that it is distributed according to your wishes. The trustee will typically require proof of need before disbursing any funds from the trust, giving you more control over how your assets are used.
It can be difficult for parents of children who suffer from substance abuse problems to know how best to provide financial support without enabling their child’s addiction. A spendthrift trust allows them to specify how and when their money should be used while still allowing their children access to the funds they need. This ensures that their assets are only used responsibly and not squandered away on alcohol or drugs. Additionally, the structure of a spendthrift trust can also help protect against creditors seizing assets if the beneficiary has unpaid debts or bills associated with their addiction.
Seek Legal Guidance You Can Trust
If your child has a substance abuse problem, you might want to discuss your estate planning options with an attorney. Reach out to David Bale to have a confidential conversation and discuss what options, including a spendthrift trust, would be best for your specific situation. Attorney Bale has experience working through these challenging situations and can advise you on your best options. Contact The Law Office of David G. Bale in Westerville, Ohio, to set up a confidential consultation.