To protect a child with substance abuse issues in your estate plan, you'll want to ensure your assets support them without enabling harmful behavior. This often involves using legal tools and careful planning. Here's how:

1. Create a Trust Instead of a Direct Inheritance

Avoid giving a lump sum outright. Instead, use a trust to manage the inheritance:

• Discretionary Trust: Gives the trustee full control over distributions. This is ideal when the beneficiary may not act in their best interest due to addiction.

• Spendthrift Trust: Protects the assets from creditors and from being misused by the beneficiary.

• Incentive Trust: Sets specific conditions the child must meet (e.g., maintaining sobriety, attending rehab, or holding a job) to receive funds.

2. Choose the Right Trustee

Appoint someone responsible (not the child) to manage the trust—this could be:

• A trusted family member (not too emotionally entangled),

• A professional fiduciary, or

• A corporate trustee (e.g., a bank or trust company).

3. Include Specific Provisions

Work with an estate planning attorney to:

• Authorize the trustee to pay for rehab, counseling, or medical expenses directly.

• Include guidelines for withholding or adjusting distributions during relapses.

• Allow the trustee to hire addiction experts or require drug testing before distribution.

4. Letter of Intent

Write a non-binding letter to the trustee explaining your child's struggles, your wishes, and your goals for their care. This helps the trustee make informed decisions aligned with your values.

5. Consider a Special Needs Trust (if applicable)

If the addiction has resulted in disability (mental or physical), a special needs trust might be appropriate to maintain eligibility for government benefits.

6. Use Life Insurance Strategically

You can fund the trust with a life insurance policy to ensure there's a reliable source of support, managed by the trustee under your terms.

Contact a Substance Abuse Planning Lawyer in Vermont Today

You want what's best for your child with substance abuse issues, and we at Will and Trust Planning understand what that means. Our estate planning attorney in Vermont will review your assets, listen to your wants, and provide the best legal options for you so that your goals for your family are met. Contact us by filling out the online form or calling us directly at 802-773-4935 to schedule a no cost Peace of Mind Planning Session today.

We at Will and Trust Planning provide services throughout the state of Vermont, either virtually or in person, including, but not limited to, Windsor County, Bennington County, Rutland County, and Addison County, including the cities/towns of Rutland, Middlebury, Manchester, Londonderry, Brandon, Dorset, and Bennington.