Estate planning for a child with addiction involves more than just leaving an inheritance. It's about designing a plan that fosters recovery and safeguards their long-term well-being. Parents with children struggling with addiction often face complex decisions, but a thoughtful plan can provide peace of mind and stability for both parents and children.
When a child is facing addiction, unrestricted access to their inheritance can be risky. Establishing a carefully structured trust allows parents to protect their child's financial future while offering critical guidance on how funds are distributed and used.
Standard trusts, such as those for minors or individuals with disabilities, may not be ideal in this context, as they don’t address the specific challenges of substance use. A trust for a child with addiction needs to take into account the individual’s unique needs and recovery path, ensuring it provides a supportive and constructive framework.
A trust designed for a child with a substance use disorder can serve different purposes depending on parental goals. Some parents may choose to cover basic living needs — like housing, food, and healthcare. Others may opt for a more active role, where the trust contributes to rehabilitation, therapy, and ongoing support as part of a comprehensive treatment plan.
By working closely with an estate planning attorney, parents can customize the trust to fund specific recovery efforts. These discussions allow the trust to reflect the family’s goals and the child’s needs, potentially making distributions conditional on recovery progress.
To effectively support a child with addiction, it’s important to understand that recovery is a process that can take time. Relapses are often part of this journey, which includes stages like:
A well-designed trust will be flexible enough to handle relapses without penalizing the child, focusing instead on supporting their continued efforts toward a stable and healthy future.
Non-monetary incentives can motivate a child to maintain their recovery efforts, though cash-based rewards should be avoided as they can increase the risk of relapse. Alternatives like funding a vacation, providing access to a vehicle, or covering gym memberships are safer options that encourage progress while supporting a healthier lifestyle. The trustee can use their discretion to offer these rewards as recovery milestones are achieved.
Key Takeaways:
When planning for a child with addiction, creating an estate plan that supports their recovery and safeguards their future is essential. At the Werner Law Firm, our trust attorneys can help craft a plan that meets your family’s unique needs, ensuring your child receives the guidance and resources needed on their journey to wellness.
If you have questions, schedule a free consultation through our online appointment page.
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Reference: Kiplinger (Mar. 8, 2019) "Designing Trusts for Substance Abuse Problems"
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