New York Estate Planning & Elder Law Blog
It is difficult to turn on the news today without hearing tragic stories of how the opioid crisis that has swept the United States impacts families and communities. While many of the unfortunate effects of addiction can easily be seen, there are more unintended consequences that need to be taken into account when discussions about addiction and estate planning intersect. Often, individuals dealing with addiction have well-founded concerns that any inheritance they leave to an individual could be squandered on the addiction itself. That can be a disheartening possibility. A recent article from WealthManagement.com reminds us that there are options available to help deal with the role addiction might play in your comprehensive estate planning strategy.
Bequests
Disinheritance is a troubling option for many reasons. The prospect of completely cutting an individual out of any inheritance can difficult to consider, especially when the heir involved is already suffering from a serious condition like addiction. However, you may want to consider leaving a smaller bequest to that individual if you are concerned that they may use their inheritance to facilitate an addiction problem. You may also want to consider leaving the inheritance earmarked for the individual that is suffering from addiction to siblings or other family members that you can trust to safeguard the inheritance and work with the individual to overcome addiction. If you choose the latter, you must make sure that you have a conversation with the individual(s) you are considering for this to make sure that they are prepared and willing to undertake this kind of responsibility.
Trusts
Trusts can be an effective tool for addressing addiction when considering estate planning. Trusts can be established with terms that direct how the assets within the trusts will be distributed. Instead of simply allowing assets within a trust to flow through to a beneficiary, you can design a trust in a way so that it makes distributions from the trust discretionary. This may allow you to put in place some terms that can help control how assets within the trust are distributed for discretionary purposes. You can also include language that spells out terms a beneficiary must accept in order to be eligible for the assets in the trust – regardless of whether those assets are discretionary or not.
A trust protector can also be an effective way to address addiction or future issues that might arise and endanger the assets you have put into a trust for a beneficiary. Trust protectors can be given the authority advise a trustee as to the administration of the trust and may also be given the authority to approve or disapprove of discretionary distributions from the trust depending on the terms of the trust and the role the grantor has established for the individual. They can also be given the ability to transfer assets from one trust into another should circumstances deem it necessary. An experienced estate planning attorney can help you understand the many options you have when it comes to using trusts in your comprehensive estate plan.