Trusts for Family Members with Addictions

The news each week is fraught with stories of individuals and families caught up in the opioid crises, where loved ones struggle with addiction, and often succumb to overdoses.  Unfortunately, substance abuse addiction strikes close to home for many families, impacting as many as one in seven Americans.   Prior to becoming a lawyer, I worked as a mental health therapist, helping hundreds of families navigate various life complexities, including addictions.   Unfortunately, addictions of all types are common in our society, including alcoholism, gambling, gaming, sex, social media, etc.  Helping a loved one experiencing addiction is complex, and at times overwhelming.   One thing all families struggling with an addicted loved one have in common is that we all want our loved ones to be safe, and we all hope one day for a successful recovery. 

Addressing the needs of family members with addictions is often overlooked when developing an estate plan.  The thought that inheritance money could be used to enable addictive behavior can be particularly troubling.  Fortunately, it is possible to structure your estate plan in such a way that any inheritance you leave is ensured to have only a positive impact on your loved one still struggling with an addiction.  The following are some of the ways to accomplish this goal:

Lifetime discretionary trusts are trusts that are created to ensure that a loved one struggling with addiction is not given a lump sum of cash immediately following your death.    Instead, the trust is structured so that the trustee of your choosing has the ability to slowly disperse funds from the trust as needed to pay for any desired treatment, care, living expenses, education, etc.   Your trustee should be carefully chosen, it should be someone with a solid understanding of addiction, and someone you can trust will be responsible for making sure the trust funds are used in a way that will positively impact your loved one’s life.  

The trust can be structured to remain in place for the entire life span of your loved one.  However, in the event that your loved one overcomes her addiction, you can give your trustee discretion to entrust your loved one with large lump sums of their inherited funds, or discretion for the trustee to turn 100% of the assets of the trust over to your loved one.   Structuring a trust in this manner ensures that you are able to leave a legacy for your loved one, while at the same time having peace of mind knowing that your assets will not be used to fuel destructive addictive behaviors.

Paying for treatment

Recovery is the end goal for any individual struggling with addiction.  One of the ways your trust can be a blessing in the life of your loved one is when used to pay for an addiction recovery treatment program.

After your passing, if your loved one desires to voluntarily receive treatment, there can be trust provisions that will provide for payment of some or all of the expenses of this treatment.  Similarly,  in other circumstances, if your remaining family determines that additional intervention is required to ensure the safety of your loved one, your trust can provide the funds to pay for involuntary treatment until your loved one is safe and hopefully on the road to recovery.

Incentive trusts

A trust can also include incentive features to help motivate or encourage healthy behavior and choices for your loved one struggling with addiction.  For example,  your trust can include provisions that your loved one is required to voluntarily seek treatment and remain active in treatment for a period of time in order to obtain a certain benefit paid for by the trust, i.e. a new car.   Although there may be pros and cons to this approach as it relates to your loved one’s recovery, the intent is to incentivize voluntary treatment in the short term so that your loved one can have access to the remaining trust funds by virtue of maintaining a sober life.  This approach will likely be most successful when paired with payment of treatment as discussed above so that there are resources to fund the treatment, and then added benefits that can help to encourage successful long term recovery.

Every family is unique, and navigating a loved one’s addiction adds a level of complexity when deciding what to do with your assets after you pass away.   A properly created estate plan can ensure that your assets are used in a way that encourages a positive outcome for your loved one, and provides a safety mechanism so that your legacy is not used to enable the problem at hand.  Call us today at 803-764-9555 to schedule a consultation and we will create a plan to fit your unique family situation.