Estate planning for a child with addiction is not just about leaving them an inheritance — it’s about ensuring that the inheritance supports their recovery and future well-being. Parents often find themselves facing tough decisions when their child struggles with substance abuse. However, creating a plan with clear goals can provide a sense of control and security for everyone involved, as per Kiplinger.
When a child has an addiction, direct access to their inheritance can do more harm than good. A well-structured trust can help protect the child and their financial future, especially when the trustee has clear instructions and guidance on handling distributions.
What kind of trust should you set up for a child with addiction? Trusts designed for minors or those with intellectual disabilities may not be appropriate in this case, since the goals are very different. For children struggling with substance use, a trust must account for their unique needs and the challenges they may face in their recovery journey.
A trust for a child with a substance use disorder can either play an active or passive role in their recovery. Some parents may prefer a trust focusing solely on the child’s basic needs — housing, food and healthcare. Others may want a more proactive approach, where the trustee is involved in the child’s treatment plan, helping to pay for rehabilitation, therapy and ongoing support.
Parents should discuss with their estate planning attorney how they want the trust to work. Should it fund recovery efforts? Should distributions only be allowed if the child is making progress toward recovery? Having these conversations ahead of time ensures that the trust aligns with the parents’ goals and the child’s long-term needs.
Understanding the recovery process is essential to structuring estate planning for a child with addiction. Recovery doesn’t happen overnight. Many children go through several stages before they reach a place of stability, and setbacks are common. In fact, relapses are often part of the process.
One model of behavioral change, known as the Transtheoretical Model, suggests that recovery involves several stages, including:
- Precontemplation: The child is not yet ready to address their addiction.
- Contemplation: They recognize the problem but feel conflicted about taking action.
- Preparation: The child begins making small changes and planning more significant steps.
- Action: The child actively works to change their behavior and engage in recovery.
- Maintenance: They develop coping strategies to maintain sobriety.
- Relapse: Relapse is common but can be seen as part of the learning process.
A trust designed to support recovery should not penalize the child for relapsing. It should instead provide resources to help them get back on track and continue their journey toward a healthier future.
Incentives can be a helpful tool in encouraging a child with addiction to stick to their recovery plan. However, offering cash as an incentive is generally not recommended, as it can lead to a greater risk of relapses.
Incentives should instead be non-monetary, such as paying for a vacation, using a vehicle, or covering the cost of a fitness membership. The trustee should be able to decide when the child has met the goals necessary to earn these incentives. This approach helps ensure that rewards begin with genuine recovery progress.
When planning for a child with addiction, the right estate plan can make a significant difference in their recovery and long-term well-being. By setting up a specialized trust, you can offer them the support they need without the risk of enabling harmful behavior.
Don’t leave your child’s future to chance—take control by working with an experienced estate planning attorney who can help you structure a plan that aligns with your goals and safeguards your child’s inheritance. If you would like to learn more about estate planning for complicated family histories, please visit our previous posts.
Reference: Kiplinger (Mar. 8, 2019) “Designing Trusts for Substance Abuse Problems“
