Estate Planning When Your Beneficiary Has an Addiction Problem

November 7, 2010 by Scott C. Soady

Many clients have questions about leaving a distribution from their estate to a beneficiary who has an addiction. Leaving money or assets to an individual who has an alcohol, gambling, or drug addiction can be concerning so they want to make sure that the individual will not squander their inheritance because of their addiction.

The experienced estate planners at Scott C. Soady, A Professional Corporation can include custom provisions in your revocable living trust to keep an addicted beneficiary from receiving a distribution. Such provisions can be tailored to fit your specific situation. You can provide that the beneficiary submit to drug or alcohol testing, be sober for a specific period of time, be employed for a certain period of time or other specific conditions before they can receive a distribution. You can keep the inherited assets in trust for such a beneficiary and only have it distributed by a trustee at various intervals if he or she remains sober. You can provide that the beneficiary may use trust funds to receive treatment or rehabilitation. There are many options to provide for a loved one but also insure that the money will be used wisely by the beneficiary.

Also consider the drug or alcohol addiction of a person you are considering acting as your agent under a power of attorney. The agent under a durable power of attorney for finances would be the individual handling your finances should you become disabled. An adult child who has a gambling, alcohol, or drug addiction may not be the best choice to be your agent under a power of attorney.

One of the benefits of a trust is that they can be drafted to include custom provisions to cover a myriad of situations. They can also be amended at any time while the trustor is still alive if a beneficiary’s situation changes and the trustor wants to make different provisions.

At Scott C. Soady, A Professional Corporation, our goal is to draft an estate plan that will meet your needs whatever your particular situation. Call us for a complimentary consultation.