Estate Planning for Parents of a Child Battling Addiction
If you are the parent of a kid (or an adult) who struggles with substance use issues, there are some important considerations that factor into your estate plan. Over the years, we have learned a few things (professionally and personally) that can have a big impact on what you do for your own planning when you have a child battling addiction. Here are our top 5 tips:
1. Create a trust to protect any assets you leave behind.
A will alone will not make sure someone is designated to manage assets you leave behind – only a trust can do that. If you prepare a simple will, rely upon the laws of the land to determine where your assets go when you are gone, or pass assets directly by way of a beneficiary designation (such as life insurance or retirement accounts), then those assets will go outright to your child, without restriction or guidance for someone who may not be able to manage those assets responsibly. Many parents tell us that they do not want to leave a child with an addiction problem anything out of fear it will be spent on drugs instead of the things they would want to see the money be spent on - housing, health care, quality substance use treatment, education, or any number of life-enhancing things. Only a properly set up trust will ensure that a third party is there when you are no longer around to manage the assets you leave behind to oversee how the assets you’ve worked so hard to accumulate are utilized. Which brings us to our next point…
2. Be thoughtful about your chosen trustees.
First and foremost, pick individuals to serve as successor trustees who can say “no” when your child comes begging for money to satisfy a fix. Ideally, your designated trustees will be well aware of your child’s situation and know that they need to dig into what is happening in your child’s world before making sizeable (or, in some cases, any) distributions. Those trustees should also understand when it is appropriate and desirable to make trust distributions and be prepared to ask the right questions - or even require drug testing - before doing so. You should also choose at least 3 successor trustees, including one person who is much younger than you and who will likely be around for many years to come, who will be responsible for managing and distributing assets when you are gone. If you cannot come up with any ideas for potential trustees, consider designating a professional trustee. Addiction can be a lifetime battle and you will want to make sure the assets you leave behind are well-managed for your child when you are no longer there to oversee them.
3. Make it clear what you want the assets you leave to be spent on.
Be clear about how you want the assets you leave behind to be spent. Your child may require a special asset-protection or special needs trust if they qualify for certain benefits you want to see them continue to receive. Or, if they are terrible with money and at potential risk for incurring substantial financial liabilities, you may wish to ensure that their assets are protected properly from potential creditors and go towards making sure their needs can be met throughout their lifetime. Get specific if you want assets to be utilized to pay for treatments not covered by insurance, residential or wilderness programming, or sober living houses while your child is in treatment and active recovery. If there are conditions that need to be met for a trustee to make distributions, lay them out so that they do not have to answer questions or explain their actions to your child down the road. Clear expectations and guidelines will help everyone involved and reduce conflicts between your chosen trustee and your child. If you decide to name a professional trustee, be sure they are familiar with and truly understand the substance use and recovery world. You can create positive incentives to encourage your child to seek or stay in recovery if you structure your trust the right way, rather than impose punishing restrictions.
4. Invite your child to execute a health care agent form and a durable power of attorney.
Estate planning is not just limited to making your own plan. Invite your child to execute a health care agent form (also called a health care proxy) and a durable power of attorney. They should also do a will of their own. All of these documents can be prepared for them once they hit the age of 18 and you are no longer legally able to do things on their behalf without their express permission. If they have reservations about executing these documents, let them know that they can limit the authority they give you, limit the use of the documents to certain providers, or limit the availability of the documents to certain circumstances (such as while they are hospitalized or attending an inpatient rehab program) as they wish. Many mental health care providers who deal with teens and young adults in substance use settings are well-equipped to facilitate conversation about releases, waivers, and what authority your child may wish to provide you. If you are in Massachusetts or New Hampshire, we are more than willing to help with these conversations and put our own unique perspective to work. Giving you some level of authority to act on your child’s behalf can make it easier for you to do certain things like book appointments for them, get permission for others (landlords, financial aid departments, and the like) to talk to you, and facilitate taking care of your child’s business and financial affairs while they work on getting better, especially if they are in a residential or inpatient setting where their focus should be on their health and wellbeing – not making sure their landlord will give you a key so you can go feed their cat. Let them know that they can revoke the authority they give you at any time if that helps them decide to execute these documents. Also be aware that once they are adults, it is their decision about how much authority they wish to grant you.
5. Do your best by them now.
This isn’t a legal planning tip so much as an important life planning one. We never know if we are going to get a phone call with worst case scenario news coming our way. The reason for it may or may not even be addiction related. The reality is we never know when the end comes for any of us. If you imagine what that might feel like if the day ever comes, would you rather feel disappointed or upset that you didn’t do your best? Or would you rather feel confident that you have done the best you can while understanding that they will and do make their own choices? You cannot determine whether they get or stay clean and sober, but you can decide what kind of relationship you have with them. If improving your relationship now is a priority for you, consider finding a CRAFT parent group online or in your area or another parent-focused support group. You are not alone. The best groups in our experience are those that do not preach a one-size-fits-all approach, give parents advice, or utilize guilt, shame, or fear to drive action. You are the best equipped to know what feels like the best choices for you and your family.
There are plenty more topics to discuss if you are a parent of a child with an addiction – no matter what age they are. This is an area our firm is dealing with more and more and we would be happy to have a deeper conversation with you about your situation and address the unique needs of your situation. If you would like to schedule a free initial consult, click here to choose a time and complete our easy online booking process. We look forward to working with you.
