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Planning When Substance Abuse Or Addiction Is Involved – Wills/ Intestacy/ Estate Planning

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More people that you think have a connection to someone with a
substance abuse or addition issue.   This situation can
present a few twists when putting together an estate plan.  I
recently have worked with clients for whom this is an

One woman has recently divorced her spouse.  The spouse has
alcohol and gambling issues.  They have two young children and
the concern for my client is that none of her money goes directly
to the hands of the spouse with substance abuse concerns.  We
established a trust under her will to provide for her children in
the event of her death and if expenses there are to be covered by
her estate, she required that the ex-spouse present receipts for
expenditures on behalf of the children before funds being
disbursed.  She also required any distributions for housing or
education of the children  be paid directly to the landlord,
mortgage company or the educational institution.  When the
children turn 18 or are no longer living with the former spouse the
restrictions lighten up.

Another client is a couple with two adult  children, one is
a healthy normal 30 year old and the other child is a 35 year old
adult who has a history of making poor life and money choices and
is still an active alcoholic.  The concern for this client is
not to punish the child, but to keep money out of his hands to
prevent himself from having additional means to harm himself. 
When both parents have passed, they will pay for his rent,
utilities and medical treatment or Rehab should he choose.  If
he maintains a year of sobriety and maintains steady employment the
restrictions on distributions will be altered to allow him to
obtain more assets from the trust.  If he relapses, the
restrictions are reinstated.

Other things to address are the issue of who will be the trustee
for a trust when there is either a beneficiary of third party
involved with substance abuse issues.   Do you want to
have a sibling of the person in this position?  Is there
resentment between the siblings?  Will it cause more friction?
Will it bring the siblings closer together?  Do you want to
use a bank or other commercial or professional trustee or trust
department as Trustee?  This is an alternative that can be
used to give to help keep the family peace. 

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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