Protecting the Inheritances of Children with Chronic Substance Abuse or Mental Health Issues
Putting together an estate plan is something many people continuously put off. One issue that can leave a parent feeling incredibly overwhelmed is how to protect their child’s inheritance from their own poor decision making. A child who suffers from significant substance abuse or mental health issues can cause a parent to pause regarding their ability to responsibly manage an inheritance. The last thing anyone wants to consider is the idea of their adult child squandering away assets and valuables that you have spent your lifetime accruing. Fortunately, there are options available to avoid leaving your child destitute. It may be a good idea to contact an estate planning attorney to review options that best fit your specific situation.
Things to Consider When Leaving Your Child an Inheritance
Most parents want to be able to leave a legacy or inheritance for the child to benefit from. However, leaving your children an inheritance can be daunting. Common concerns when considering an inheritance for a child include:
- Whether your child is equipped to responsibly manage a sudden increase in their own personal wealth
- That their child has poor money management skills and will squander away an inheritance you have spent your entire life amassing
- That their child will lose any interest or personal drive to better themselves
- Worry that a drug addicted child will spend their inheritance to feed their addiction
- That your child will be taken advantage of by people who are after their inheritance
- If your child suffers from addiction or significant mental health issues, you may worry about their ability to make rational financial decisions.
Some of these common concerns can cause a parent to take pause when putting together their estate plan. It may even be tempting to disinherit your child altogether. While the decision to disinherit your child is a very personal one, you will surely want to meet with an estate planning attorney first to weigh the available options.
Setting Up a Trust for Your Child
An attorney with knowledge and experience in this area of practice will prove beneficial. They have a significant amount of knowledge to help you choose the best way to leave an inheritance for your child, even if they are irresponsible or suffer from addiction issues. A trust gives the benefactor a significant amount of control over the inheritance or money that is given to a beneficiary. This can give peace of mind that even after you pass away, there is some oversight into the inheritance your child has been bequeathed. When a child is given a trust, a trustee often oversees the trust and ensures that the stipulations to the trust are followed. A trustee can be a friend, family member, financial advisor or attorney.
Advantages to a Trust
There are a number of advantages to choosing a trust for your child. The last thing you want to do is disinherit your child. Severing such ties can be incredibly damaging and life altering for a child. Setting up a trust account for a child will allow for you to:
- Reduce the amount of estate taxes that will have to be paid
- Put specific expectations for when and how assets are distributed
- Allow for you to circumvent probate court
- Appoint someone to oversee the trust account that can carry out your expectations and ensure that the inheritance is managed responsibly.
- You can put a trust in place to ensure that a person has the means to be taken care of. This can be beneficial to help support a disabled child after you have passed away or pay for substance abuse treatment programs.
Accessing the services of an estate-planning attorney can be helpful when faced with protecting your child’s inheritance. For more information, contact an Arizona family trust lawyer who is well-versed in this area of practice.
Thank you to our contributing Scottsdale, Arizona Estate Planning Attorneys for their insight into estate planning.