A Troubled Child and Your Estate Plan
According to a 2011 Columbia University study, 46 percent of American high school students use alcohol or drugs (approximately six million teenagers), and that almost all those suffering from substance abuse addictions started using before they reached their 18th birthday.
Parents are often at a loss when dealing with a teen or adult heir who has a substance abuse problem or engages in other self destructive behavior. When making an estate plan the parent may be tempted to disown this child to avoid feeding into the addiction. This may seem extreme and leaves the parent unable to fully demonstrate the love they have for their child. However, with careful planning, parents can leave the full inheritance to their child with conditions tailored to the child’s individual situation.
Controlling the terms of your child's inheritance
Although a last will and testament may have conditions attached to specific bequests, a living trust provides even more flexibility in allowing you to designate funds in a subtrust for a child who will have the benefit — but not control — of their inheritance. A subtrust (also known as continuing trust) leaves control of the funds in the hands of a trustee, typically a relative or professional fiduciary, who invests the funds and make distributions on the child's behalf in accordance with your specific instructions. For example:
- If your child is not responsible enough to handle their inheritance, the trust can provide that money be distributed only for specific needs such as education, housing, food or medical care.
- If the child is a minor (with or without drug and alcohol problems), it is advisable to stagger their inheritance over the course of a number of years, for example, providing them only with income payments until they reach the age of 21, then 25% of the principal at age 21, 25% at age 25, and the balance on their 30th birthday.
An estate planning attorney can help you provide a plan that can grow with your family
While no one knows for sure what the future holds, a knowledgeable estate planning attorney can help you draft a map for your family’s future taking into account your hopes and dreams as well as the current reality. Call our Staten Island estate planning attorneys today.