A child with alcohol, drug or other addictions creates challenges for parents wanting to leave them money but not wanting to enable the child’s addiction.
At Brindley Sullivan, we know that most parents worry that an inheritance will provide a way for their addicted child to further indulge in their addiction, waste their inheritance and exacerbate their self-destructive behavior.
Sometimes, completely disinheriting the child is the answer. Parents usually only consider this if the relationship between the parents and child has been strained to the breaking point, but it can also make sense if it is truly in the best interest of the child. If the child has a long pattern of returning to the addictive behavior, it may be the best option.
If parents elect this option, the parents need to make their documents perfectly clear that they intend to disinherit the child. A “no contest” provision in their will and trust should also be included that specifically names the child so that if he or she starts a lawsuit, they will not be able to inherit anything.
Another option is to create a trust that holds that child’s share for the his or her lifetime or until the child can show they have overcome their addiction. Trusts can be tailored for the circumstances and the personality of the child and their needs.
For example, a trust may say that no funds will be paid out as long as the addiction continues. Or the trust may require drug testing before any distributions are to be made.
A trust may also include incentives for the addicted child to find and keep a job by matching money earned, for example. It might include provisions to require attendance at Alcoholics Anonymous meetings or other addiction treatment programs as a prerequisite to receiving distributions. There are as many options as there are ideas, and that’s what makes a trust such a popular planning tool.
If using a trust is the right strategy to help the addicted child, a real key to success in carrying out the intentions of the parents is to name the right trustee to manage the finances of the addicted child. Addicts are usually skilled manipulators and deceivers. The trustee will need to be strong in dealing with the child and holding to the terms of the trust.
Third-party trustees can be a good option to act as the trustee of the child’s share, or naming two family members as co-trustees often works well. Family co-trustees are usually better than one in these situations because they can present a united stand to hold to the terms of the trust. Co-trustees will be able to support each other through the potential stress of working with the addicted child.
There are many considerations and good options when dealing with the inheritance of an addicted child. The parents simply have to make the best of an already tough situation. Proper planning will give a family the direction and instructions to deal with it as best they can.