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Paul E. Riffel Tampa Estate Planning Attorney

Creating an Addiction Trust for a Loved One with Substance Abuse Issues

Creating an Addiction Trust for a Loved One with Substance Abuse Issues

This September, during National Alcohol & Drug Addiction Recovery Month, we look to provide support to families whose loved ones are struggling with substance abuse issues or are in recovery. Do you have a family member with substance abuse issues? If so, you may have realized that planning for their future can be full of tough decisions. You may want to ensure that they can live a comfortable life despite their struggles, but be apprehensive about providing any kind of financial support that might enable addiction. If this is your family’s situation, an addiction trust may be a good estate planning choice. 

Unlike a typical trust, from which distributions of interest and principal may be made to adult beneficiaries, the beneficiary of an addiction trust does not directly receive money from the trust. Instead, the trustee has the ability to make direct payments on behalf of the beneficiary for things like living expenses and medical care. This means that the beneficiary may not have to worry about being able to afford basic needs like rent, food, and healthcare, but will also lack access to cash that he or she might use for substance abuse purposes. 

If you decide to create an addiction trust, you may choose to use a disinterested third party, like a family attorney or a corporate trustee, rather than naming another family member as the trustee. This can remove emotional issues between an adult child and his or her siblings, children, or other family members from an already difficult situation.

An addiction trust may require that the beneficiary submit to substance testing to help ensure that they are not abusing any substances. If the beneficiary fails the testing, the trust may include a provision that money can only be used to pay for treatment at a facility, and cannot be used for independent living expenses, until the beneficiary has completed treatment.

An addiction trust should not be punitive towards the beneficiary. When the beneficiary has completed treatment, payments to cover their normal living expenses from the trust can resume. The creators of the trust can also decide that the trustee can pay for special services or things the beneficiary may want if they have managed to stay sober for an extended period of time, which acts as an incentive for sobriety.

 Prior to making any decisions, please feel free to reach out to our office to discuss this further. We can explain the options and help you decide what kind of provisions are advisable to include when setting up an addiction trust for your loved one with substance abuse issues.

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