Gambling. Alcoholism. Drug abuse.
These addictive behaviors – or others – may plague your family. Thankfully, if your loved ones want to break free of their addictions, numerous programs are available to help them. Addicts can find assistance from medical providers, rehabilitation centers, houses of worship, schools, employers, and groups such as Alcoholics Anonymous, Narcotics Anonymous, and Gamblers Anonymous.
However, what about family members you suspect are addicts or addicted family members who deny they have a problem? Should you include them in your will?
Disinheriting Your Addict: Think It Over First
Suppose you fear that your addicted loved one would simply blow their inheritance on illegal substances or compulsive behaviors. In that case, you might be considering whether to write them out of your will. Frankly, it depends on your situation – although such an action will cause a very emotional reaction throughout your entire family that would reverberate far into the future. Additionally, your beneficiaries may be pressured by your non-beneficiaries to share their inheritance. Disinheriting is a drastic decision. Think carefully about whether you want to place your family in this position.
Structured, Incentivized Inheritance
Another alternative is to provide a structure, such as a trust, around the inheritance. For example, you may stipulate that the addict complete a trust-paid rehabilitation program and be sober for a year before receiving the remainder of the inheritance. If the inheritance is sizable, you might require proof of sobriety every year before a set amount would be disbursed. The person who governs the trust can be a relative, a friend, or a professional trustee, such as an attorney or a bank. As addicts are known for deceiving themselves and others, the trustee you appoint should be someone who can thoroughly examine and verify the addict’s statements and written documents. The trustee must be able to deny disbursements if the trust’s conditions are not satisfied.
Social Security Beneficiaries
If your loved one is incapable of providing for themselves, they may already be a recipient of Social Security benefits that cover housing and food. In that case, you can direct your trust to pay for other bills and expenses. It is vital to have a robust legal plan that keeps your contribution from being considered by Social Security as income. If your loved one qualifies as disabled, you may wish to set up a Supplemental Needs Trust, also called a Special Needs Trust (SNT). Under the SNT, a disabled beneficiary can receive government benefits and an inheritance that pays for items. Note that the beneficiary cannot receive money outright.
Preparing for the Next Generation
Let’s say your adult child is an addict who has children. Due to the addiction, you are concerned that your child may not live long. A trust will enable your grandchildren to receive their parent’s inheritance. You can outline whether the money is to be used for educational purposes only or include general support.
Don’t Name an Addict as Executor or Trustee
The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition defines addiction as “a chronic, relapsing disorder characterized by compulsive drug seeking and use despite adverse consequences.” The Mayo Clinic states that “Gambling can stimulate the brain's reward system much like drugs or alcohol can, leading to addiction.” Current medical thought holds that addiction can be managed, like diabetes or high blood pressure, but cannot be cured entirely. Thus, an addict should not be named a trustee. Nor should an addict be named an agent or given decision-making responsibilities regarding a will, power of attorney, or other estate instruments. The temptation for addicts to throw away the estate on unhealthy behavior is too great.
Support for Families
Families of addicts need support, too. In addition to speaking with a counselor or minister, you can find help at Gam-Anon (families of gamblers), Al-Anon (families of alcoholics), and Nar-Anon (families of drug users). Go online to find more support groups, videos, and podcasts for these and other addictions. You are not alone!
Plan Ahead Now with Carolina Family Estate Planning in Cary, NC
Everyone needs an estate plan to indicate asset distribution and health directives. Should you die in North Carolina without a will (intestate), your estate will be divided between your relatives, typically one’s spouse, children, and parents. Your loved one’s addiction does not factor into North Carolina’s distribution: their inheritance portion will be in accordance with the law’s requirements.
By establishing an estate plan now, you will protect your legacy and ensure that your money is used wisely and thoughtfully for each of your heirs. Don’t delay. At Carolina Family Estate Planning, we help families build better lives by planning for a secure future via estate planning, asset protection, and long-term care planning. Unsure about the next steps? We’re here to help you get your ducks in a row. Call us today at 919-443-3035 or schedule a needs assessment call.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.