Trusts are beneficial because they can provide more control over the use of property. In cases where beneficiaries are vulnerable, trusts can be especially valuable.
Parents and other family members worried about an adult child with a substance abuse disorder may want to create a trust instead of leaving a direct inheritance for their child or choosing to disinherit them.
How can trusts help?
A lump-sum inheritance can be very problematic for an individual with a substance abuse disorder. People who struggle to control their consumption of alcohol or who abuse illicit or prescription drugs may spend any windfall they receive on their preferred intoxicating substance.
Additionally, a lump-sum inheritance can theoretically cut an individual off from critical state benefits that may help them as they rebuild their life after achieving sobriety. A well-structured trust can prevent an individual from abusing their inheritance.
A concerned trustor could even impose restrictions, such as an obligation to pass a drug test before receiving distributions from the trust. They can limit distributions to ensure a beneficiary’s continued eligibility for certain benefits.
The trustee can also serve as a source of social and emotional support for a person going through a difficult time. Grief can trigger a relapse even in cases where individuals have previously achieved sobriety. As a final note, leaving an inheritance in the form of a trust can reduce the likelihood of an adult child feeling rejected because their parent chose to disinherit them.
Establishing a trust for a family member with a substance abuse disorder can be a consequential estate planning strategy. Those concerned about the potential negative impact of an inheritance may need to discuss their unique needs with a legal professional accordingly.