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How to create an estate plan for beneficiaries with addictions – Press Telegram

Many families today are forced to deal with the problems and pains of loved ones suffering from addiction. Victims may be addicted to drugs, alcohol, or other substances. Alternatively, you may be suffering from behavioral addictions such as gambling, shopping, eating, and gender. With any of these addictions, inheritance of cash or other assets can quickly escalate the problem.

Leaving an inheritance to anyone should be carefully planned, but leaving an inheritance to an addict (past or present) requires special care. Fully giving addicts any amount of inheritance can fund actions that are destructive and even fatal, but canceling inheritance helps them recover as needed. It may mean that you can never get it. There are better options.

Talk to an advisor

Putting the inheritance of an addicted beneficiary into a trust should be thoroughly discussed with your real estate planning attorney or the adviser of another expert. If your adviser is unaware of the problem, you will not be able to address your concerns about heir addiction.

Don’t be embarrassed or confident about what to say. There is no option to do nothing. In fact, if you die without a will or trust, your spouse or child dealing with the issue of addiction may receive full assets under California’s Intestacy Act, which can lead to disasters. There is sex. Failure of a plan is a plan … it’s not just good.

Consider trust

On the other hand, setting up a trust to hold certain assets for the benefit of addicted beneficiaries helps to facilitate, rather than prevent, recovery. Trusts provide beneficiaries while protecting them from themselves and their creditors.

A well-developed trust sets out your goals in establishing a trust and provides the beneficiaries with specific instructions on when and how distribution can be made. It can be clarified that trust should be seen as a resource to support sustainable recovery, not as a “punishment” for beneficiaries.

Depending on the size of the inheritance, the trust can simply provide basic needs such as medical care, food and housing. The trustee may make these payments on behalf of the beneficiary rather than passing the funds directly to the beneficiary.

Trusts may also include provisions for rehabilitation, counseling, and other forms of treatment, from qualified professionals (to trustees or beneficiaries) who have knowledge of specific addiction issues. Support will be possible.

Trust conditions

It is important to create trust to adapt to dynamic rather than static situations. People who suffer from addiction will have different needs (and problems) than those who have been drinking for 30 days. Addictives who have recovered over the years will once again have different needs.

The trustee should be given the flexibility to adjust accordingly. Consider incentive clauses to motivate beneficiaries to seek treatment or to increase distribution flexibility when certain goals are achieved.

The trust should also specify what the trustee can and should do if an addiction problem is suspected. For example, a trustee may be allowed to request a drug test or consultation with an addiction specialist prior to distribution. Beneficiaries may be required to stay clean and calm for a period of time and / or to join support groups on a regular basis. The trustee should be allowed to make the distribution on behalf of the beneficiary rather than directly to the beneficiary (for example, paying directly to the landlord).

Finally, the trust must take into account that the beneficiary may one day receive or qualify for government benefits. Distributions from the trust should be designed so as not to interfere with the eligibility of beneficiary benefits.

Fiduciary selection

Trusts have these specific conditions and dealing with addicts can be very difficult, so the choice of trustee should be carefully considered. The trustee is the party responsible for implementing the terms of the trust you have carefully designed. The party having the problem of addiction must not be a trustee — it is virtually the same as giving them cash.

Choosing a family member as a trustee can cause serious problems, perhaps with some privacy in mind. If an addicted child consumes significant financial and emotional resources in the family, the siblings may have a grudge that impedes their obligations as a trustee. Similarly, addicted children are usually not a good choice as a fiduciary, as family dynamics can interfere.

Consider a third-party professional trustee who is a private trustee or trustee of a company (bank or other trust company) with the experience and resources to deal with a particular addiction. Third parties, perhaps more expensive in the short term, can maintain distance and make calm decisions based on carefully crafted trust. And professional trustees are unaffected by turmoil, emotional phone calls, or bad behavior at a holiday supper.

Other documents

If your loved one suffers from addiction, be sure to recommend that you implement your own medical instructions and power of attorney. You will be in a better position to help them in an emergency.

Dealing with an addicted loved one can be difficult, but things can get worse if you don’t plan what happens when you’re not here. The best solution is to work with a knowledgeable expert to plan for the protection of heirs and heritage.

Teresa J. Rhyne is a lawyer practicing real estate planning and trust management at Riverside and Paso Robles.To reach her Teresa@trlawgroup.net

How to create an estate plan for beneficiaries with addictions – Press Telegram Source link How to create an estate plan for beneficiaries with addictions – Press Telegram

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