Using a Trust to Provide for a Child with Substance Abuse Issue

Did you know that, every September, we celebrate National Alcohol & Drug Addiction Recovery Month? Observance of this month nationally can be important to those who have recovered from substance abuse addictions and to their loved ones, for whom de-stigmatizing addiction can be a lifelong goal. Proper substance abuse treatment and mental health services for those impacted by addiction can be critical to making a lasting recovery.

Parents of addicts and recovering addicts can face difficult personal choices when deciding how to financially provide for their adult children to help ensure they can receive the treatment they need and live comfortably, without enabling or encouraging an addiction or relapse. Setting up a trust with special conditions can be an effective tool for parents of adult children with substance abuse issues to provide for them long-term.

When considering how much money you should leave to your adult child with substance abuse issues in a trust, there may be a few things you want to take into consideration. For instance, rather than leaving money to be distributed in large amounts, you may want to consider inserting planned distributions of modest amounts of money at regular intervals. This will provide enough money for your child to live on with a budget, but not enough to dissipate at any given time on addiction-related purchases.

You may also want to include provisions that allow the trustee to withhold distributions if he or she suspects substance abuse and allow the trustee to instead dictate that a distribution can be used only for treatment purposes in a given period of time. You can include provisions that allow the trustee to use extra money above the typical distribution for direct payments for counseling and treatment.

If you are setting up a trust for the benefit of your child with substance abuse issues and for siblings without similar issues, you may decide that the siblings’ inheritances will be distributed to them earlier, or even that they should receive their shares outright without being held in trust for any period of time. You do not have to make the same decision for every beneficiary. You could choose instead to keep the portion of the inheritance for your child with substance abuse issues in trust for life, with a trustee responsible for overseeing distributions, and the remainder going to his or her children, if they have any, or to the secondary beneficiary of your choice.

If you are the parent of an adult child with substance abuse issues, you may fear leaving him or her a lump sum of money that may be squandered or disinheriting him or her with the possible result of poverty and homelessness. Setting up a trust with specific conditions related to your child’s addiction may be a wise choice. It would be best to consult an estate planning attorney in your state to learn more about setting up a trust for the benefit of your adult child with substance abuse issues. Our office helps families put estate plans in place that reflect their unique needs and circumstances. Please feel free to reach out to our office to set up an appointment.