In a perfect world, parents would not need to be concerned about helping children with addictions. However, we live in a world where people are frail, and where addictions do exist. My clients often ask me how they can properly provide for a child who has addictions in a way that will help them and yet not support the addiction after the parent is gone. The purpose of this blog is to provide a parent in this situation with 3 ways they can use their estate planning to provide for a child with addictions.
- A REGULAR TRUST
A regular trust is nothing more than a parent setting up a trust where distributions will be made on behalf of an addicted child without providing distributions directly to that child. Essentially the trustee will continue to act for the lifetime of the child in providing basic needs without ever making a distribution directly to the child. The basic needs that exist could include the cost for food, shelter, medical care, and/or any other basic needs that exist.
The problem with a regular trust is that it doesn’t necessarily provide any specific incentives for the child. Rather, this type of trust simply provides the basic necessities for the addicted child so that the parent can rest knowing that the basic needs for that child will be met through their lifetime.
- A MILESTONE TRUST
Another option that is often used by my clients is the creation of a milestone trust. This type of trust essentially states that the child must meet certain specific milestones in order to have a portion of the trust used on their behalf for their benefit.
For instance language could be put in a trust that if it is determined that the child has a drug or alcohol abuse problem the trustee will offer the child an opportunity to enter a treatment program to be paid for by the assets of the trust. Additionally, the trust could state that if the addicted child refuses to seek treatment, which in the reasonable discretion the trustee feels is necessary, the trustee can withhold payments of both income and principal until the addicted child proves to the satisfaction of the trustee that the child no longer has an addiction or has already received treatment.
Estate planning does provide options for a parent with 8 and addicted child. The options that exist can be customized by the parent to help that child with their addictions without controlling the child or without nurturing the addiction further.
If you have questions about how your estate planning can be used to help an addicted child, we can help. Call us toll free at 877-232-6101 or 208-232-6101 for a consultation with Lane Erickson and the Racine Olson team of Estate Planning attorneys in Idaho. You can also email Lane Erickson directly at email@example.com. We will answer your Idaho Estate Planning questions and will help you solve your Idaho Estate Planning problems.
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