It sneaks up on you like a thief in the night. It takes without hesitation, not caring what it destroys. It does not matter if you are young or old, rich or poor, urban or rural, it will get you if it can. Opioid addiction is ravishing our nation.
It is something families can no longer ignore when
crafting their estate planning documents. If you know a loved one you plan on leaving assets to is struggling with addiction there are a few different paths you can take.
Disinheritance
The only people who have a legal right to a portion of your estate, no matter what you say in your estate plan, are your spouse and your minor children. All other relatives can be completely disinherited if you so choose. This is a harsh option, but some people prefer it, and that is okay.
Smaller Gifts
Some families choose to leave a smaller bequest to a family member that struggles with addiction. You can make it clear why you are doing what you are doing, or simply say that funds given during your lifetime should be considered their share.
This option is a way to say that you still love your child without giving them fuel to feed his or her addiction. Families who have spent a significant amount of money on rehab for one child, while not giving much to other children often find this option appealing.
One downside to this option is that it gives the child who gets less than his or her
siblings money to fund a challenge to the estate plan. This wastes that
money, and drains money from the rest of the estate since it must pay to defend itself.
Using A Trust
More and more clients who are worried about addiction are choosing to set up incentive trusts. These trusts contain language that incentivizes good behavior like graduating from college or going to
rehab, and discourages bad behavior like drug abuse. Courts and trustees have become fans of these trusts because they take some of the hard decisions trustees are forced to make when beneficiaries are making poor life choices out of their hands.
The downside to these trusts
are that they are a bit more expensive to administer because it is wise to pay an impartial third party
serve as the trustee. Asking other siblings to serve as the trustee and police one another’s behavior is an invitation to discord and distrust. Addiction exacerbates these problems because those who are addicted resent having their behavior policed, and the trustee becomes the “bad cop” who is always saying “no.”
We Can Do Better
As advisors, we know we must do better when it comes to serving clients who have an addict in the family. We know our families need to throw up every defense against the scourge of addiction that they can muster. We have a role to play, and we are ready to take action.