How to Create a Trust for Children With Substance Abuse Problems
Oct. 17, 2023
As they age, many parents realize the need to make a comprehensive estate plan to provide for their loved ones and children after they pass. Most people start this process by drawing up a simple will, but setting up a trust is another good option under certain circumstances. One such instance is if you have a child who struggles with a drug problem and you’re concerned about how they’ll manage their inheritance once you’ve passed.
If you’d like to learn more about estate planning for children with a drug problem, reach out to me, David W. Walker Attorney At Law. I’m able to assist families in all their estate planning needs in and around Jefferson City, Fulton, Boonville, and Columbia, Missouri.
Possible Inheritance Concerns for a Child With a Drug Problem
As a parent, there’s no end to your worries about your children even if they’re responsible, healthy, productive members of the community. However, when your child faces serious issues with substance abuse, these worries compound and you’ll understandably want to do everything you can for them. If you’re estate planning for a child like this some concerns you have may include:
They will use the money to feed their drug habit
They may sell off assets you’ve left for them to buy drugs
They may use this sudden windfall to over-indulge in drugs that could result in an accidental overdose
If they’ve run up debts from their drug habits, their inheritance may be taken away to pay off these creditors
Spendthrift Trusts and How They Work
One good option for parents facing this issue is to set up a spendthrift trust. This type of trust can be used for any beneficiary who can’t be depended on to use the funds wisely or when there’s a fear that creditors may be able to access the funds. The beneficiary of a spendthrift trust does not have direct access to the principal balance and can only receive funds that are distributed to them by the trustee. Because the beneficiary is restricted to this money, their creditors are also restricted from accessing it.
The Trustee’s Role
One of the most important components of a spendthrift trust is the role of the trustee. As with any trust, assets are placed into it and ownership is then legally transferred over into the name of your trustee. This person is then responsible for managing the trust and distributing its assets according to your wishes. When a spendthrift trust is used, the trustee’s role grows even larger since they will be the responsible party long after you’ve passed away.
This should be someone that both you and your child know and trust, as well as someone you can count on to make practical decisions should a modification be needed. Many trustors will impart a certain amount of agency for the trustee if changes need to be made in the future.
Strategic Legal Planning
Anytime you begin estate planning, you should enlist the help of an experienced attorney, and at no time is this more important than when you need help protecting the inheritance of children with a drug problem. Trusts like this can be complicated to set up correctly. You’ll need the oversight and guidance of a reputable estate planning attorney to ensure they’re legally enforceable tha continue to serve your child for years to come.
Seek Trusted Legal Guidance Today
If you’re in the Columbia, Missouri, area and are worried about a child who has a substance abuse problem, contact me today, David W. Walker Attorney At Law. Together we can explore your options for setting up a trust or using other estate planning tools to help them.