Stephen’s son, Jason, now in his thirties, has struggled with drug addiction since he was a teenager. Stephen wants to treat his three children equally. However, he is concerned that Jason will use any inheritance to feed his habit. Is there a planning tool that Stephen can implement to address this problem?
Stephen can create a trust that expressly states Jason’s intent to prevent trust resources from being used to purchase drugs or alcohol. The trust can give the trustee discretion to require Jason to submit to drug testing, counseling and/or rehabilitation. Further, the trust can give the trustee the authority to use funds to pay for drug testing, counseling and rehabilitation services needed.
The trust might provide that distributions are to be made directly to Jason only after he has proven that he has remained drug free and sober for a specified time.
Stephen should consider adding provisions that require Jason to meet certain milestones before any distributions from the trust are made. Rather than insistance that Jason participate in a specified rehabilitation program and obtain a certain number of hours of therapy, it is preferable to have the trustee determine that Jason has achieved levels of sobriety before a distribution is made. The trustee should be able to use resources from the trust to consult with professionals who can help the trustee assess whether the distribution of funds at any particular time in Jason’s recovery would be advisable or, alternatively, might lead to relapse.
Stephen could include a trust provision establishing the alternative beneficiaries of the trust, should Jason not achieve full recovery. For instance, the trustee could be given authority to pay certain of Jason’s bills - for instance, for housing, food, and clothing - with no funds distributed to him directly.
Alternatively, the trust could benefit Jason’s descendants, if any; or, if there are none, Jason’s siblings. If Jason has grown children, and Stephen chooses to benefit them, Stephen should decide whether the trust should be continued with distributions at the discretion of the trustee to the children, or terminated, with the funds distributed to Jason’s children outright.
Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm in Fort Worth. She lives in beautiful Somervell County, near Chalk Mountain.