Issue 46.12
Parents of adult children with drug and alcohol addictions struggle with how to handle that child’s inheritance in their will or trust. Most parents worry that an inheritance will enable their addicted child to further indulge in their addiction, wasting their inheritance and furthering their child’s destructive behavior. But disinheriting the child often seems like a drastic step that will have unintended emotional and financial consequences. Disinheriting a child may also provoke a legal challenge from that child who was disinherited.
Sometimes disinheriting a child is the answer, however. If the relationship between parent and child has been strained to the breaking point, doing so might make sense. When disinheriting an addicted child, parents should prepare for the potential of a future legal contest by having reliable witnesses who will testify as to the parents’ mental capacity. Also, the parents should make their documents perfectly clear that they intend to disinherit the child. A “no contest” provision in their will or trust and trust should also be included.
Rather than disinheritance, another option is to create a trust that holds that child’s share for that child’s lifetime, or until the child can show they have overcome their addiction. Trusts can be customized for the circumstances and personality of the beneficiary. The trust may say that no funds will be paid out as long as the addiction continues. The trust can require testing before any distributions are made. It may include incentives for the addicted child to find and keep a job by matching money earned. It may include provisions to require attendance at AA meetings or other addiction treatment groups.
A real key is naming the right trustee to watch over the affairs of the child. The trustee will need to be strong in dealing with the child and holding to the terms of the trust. Naming two family members as trustees often times works better than naming one because together they can present a united stand. Co-trustees will be able to sure-up each other under the potential stress of working with the addicted child.
There is no perfect solution when dealing with the inheritance of an addicted child. The family simply has to make the best of an already tough situation. Proper planning will give your family the direction and instructions to deal with it the best they can.
Sean Sullivan is a shareholder with the firm of Brindley Sullivan, PC 382 S. Bluff, Ste. 150, St. George, UT 84770, (435) 673-9220.