Parents want the best for their children. The entire point of a will and trust is to provide for children when their parents die. However, parents may naturally worry when a child who should be a beneficiary struggles with drug or alcohol addiction. The parent may fear the child will use the sudden influx of funds to feed her or his addiction, and something that should have been a great gift suddenly puts the child in severe danger.
Parents should create estate plans early in life. When children become adults, they may fall down dark paths. Fortunately, there are ways for parents to provide for their children with peace of mind knowing they will not waste their windfall.
Create a specialized trust
Instead of giving an addict an inheritance with no strings attached, parents can create trusts. Someone else will have control of the money, and the addict can gain access through various provisions. For example, a parent can state that the addict will have full access to the inheritance after graduating from college and remaining sober for a set period of time.
Do not put the addict in the role of trustee
While an addict should not have this responsibility, it may be best to avoid putting the other children in this role. The best course of action may be to assign the role to a neutral third party. That way, there is less chance of there being conflict amongst family members upon the parent’s death.
Encourage setting up powers of attorney
While the parents are still alive, they should encourage the child who struggles with addiction to establish medical and financial powers of attorney. In the event the child enters such a state to where he or she cannot make important decisions independently, it is vital for a loved one to be able to step in to assist him or her.