It can be terrifying to watch the icy grip of addiction grab hold of your loved one. Yet, millions of Americans watch their child, spouse, sibling or parent grapple with drug and alcohol abuse. While these addictions can strain relationships, you still have to decide if you want to incorporate your loved one into your estate plan. While that might seem like a risky move, there are ways to address the matter in a way that protects your assets, provides financial stability to your loved one and encourages them to seek out and complete the treatment that they need.
Effectively doing so will require close attention to detail and knowledge of the estate planning process, though, which may be something with which you’re unfamiliar. Don’t stress, though. In this post we want to give some ideas for what you can do to formulate the kind of estate plan that you want. Just be aware that this doesn’t constitute legal advice, as there are other estate planning options out there and you need to select those that are best for you.
There are so many estate planning options out there that it can be easy to get tangled up in the weeds. But here are some actions that you might want to give more consideration if your intended beneficiary is struggling with addiction:
- Creating an incentive trust: This type of trust prevents the release of assets until the named beneficiary complies with an identified condition. In a situation where the beneficiary is struggling with addiction, that condition could be the completion of a substance abuse treatment program or remaining sober for a specified period of time. These conditions can be motivating enough to get your loved one back on track and pursue a life defined by sobriety.
- Using a spendthrift trust: If you’re worried about how your loved one will use their inheritance, then you can turn to this kind of trust, which allows you to release assets incrementally over time so that they’re not quickly wasted away. This might provide your loved one with long-term support to hopefully help them get to a point in their life where they can beat their addiction.
- Giving gifts during your lifetime: Lifetime giving allows you to provide your loved one with smaller amounts of wealth while watching how they handle those newly acquired assets. This can give you a better idea of how they’ll handle an inheritance, should you choose to leave one for them, thereby providing you with a sense of how you may need to modify your estate plan to ensure appropriate distribution schemes.
- Working with addiction professionals: Simply giving money to your loved one who is struggling with an addiction can be risky. But by working with addiction professionals, you can gain a sense of what sort of actions will best support your loved one in their search of recovery. This can provide direction as you create your estate plan, providing assurances that you’ve done everything you can to tailor your plan to meet your loved one’s needs.
Be intentional in the creation of your estate plan
When dealing with issues of addiction, it’s critical that you purposefully use the estate planning tools available to you. If you try to improvise estate planning or use the simplest estate planning vehicles available to you, then you could miss out on key opportunities to support your loved one and protect the longevity of your estate. So, be sure to work closely with your attorney to ensure that you create an estate plan that truly helps you reach your goals.