Parents of adult children often take great joy in watching them pursue careers and develop their families. It is common for parents to continue providing practical support, financial assistance and life advice long after their children become independent. Many older adults feel proud of their adult children’s accomplishments.
In some cases, parents may grieve the life they had dreamed of for their children because of the challenges they face. An adult child who struggles with alcohol abuse, misuse of prescription drugs or dependence on controlled substances may have a hard time maintaining healthy relationships. They may not finish school or be able to keep a steady job, let alone maintain their own home.
In fact, they might even engage in criminal activity, such as stealing from their family members, to obtain their substance of choice. Parents watching their adult child struggle may reach the uncomfortable realization that leaving them an inheritance might only fuel their worst habits. Is it possible to leave a child with a substance abuse disorder a meaningful inheritance, or must a parent disinherit them over the risk of them abusing what they receive?
Trusts can help in difficult scenarios
Leaving someone an inheritance through a will gives them total control over the assets they receive. Trusts provide a layer of separation and therefore protection from misconduct. Concerns about a beneficiary misusing an inheritance are among the most common reasons that people cite for establishing trusts. A trust designed for a beneficiary with a substance abuse disorder can name a different adult as the trustee who manages the resources that an adult child can use after their parent dies.
Instead of receiving money or assets that they could liquidate, they can ask for support or distributions from a trust, and the trustee must approve every request. The parent planning the trust may instruct the trustee to only make payments to outside parties to prevent the adult child from having direct access to resources from the trust.
People may even require substance abuse counseling or drug testing before a beneficiary becomes eligible for distributions from a trust. They could limit what expenses beneficiaries can cover with trust resources. With the right planning, it is possible to provide support and even an incentive to achieve sobriety for an adult child struggling with addiction.
Parents with unusual family circumstances often need to use creative solutions during the estate planning process. Identifying complicating factors before creating or updating an estate plan can be a smart move for someone concerned about how a family member might misuse an inheritance.
