Things to Know When Planning for an Addicted Loved One

It has been said that the only thing harder than being an addict is loving one. It can be challenging for a parent to bring a child into the world full of hopes and dreams about their future and then watch them spiral down into addiction. Having someone in your life who struggles with substance abuse is never easy, no matter the circumstances, the relationship, or their age. Nonetheless, you can tailor your estate planning to adjust to addiction.

Estate planning often involves dealing with difficult situations. Putting off thinking about these decisions is not the solution. By delaying making plans for how best to care for an addicted loved one when you are no longer around, you risk losing an opportunity and control that can further complicate matters.

How to Best Help Someone Struggling with Substance Abuse

Approximately 17 percent of Americans over the age of 12 had a substance use disorder in 2022, according to the latest National Survey on Drug Use and Health.^[1] That is equivalent to 48.7 million people, including 29.5 million who have an alcohol use disorder, 27.2 million who have a drug use disorder, and 8 million who have both alcohol and drug use disorders.^[2]

Despite these grim statistics, the good news is that life after addiction is not just possible—it is the norm. Most people experiencing alcohol and drug addiction recover, survive, and go on to live full, healthy lives. A study from the Centers for Disease Control and the National Institute on Drug Abuse found that three out of four addicts eventually enter recovery.^[3]

Treatment and recovery services are critical to successful addiction recovery. Financial barriers to these services are one reason why people struggling with substance abuse go untreated.^[4] Family members of people with a substance use disorder might be in a position to provide them with money and material support but worry that doing so will be counterproductive.

Estate Planning for Beneficiaries with Addiction Substance Abuse Issues

There is no one-size-fits-all solution for assisting a loved one who is dealing with substance abuse. What most experts agree on, though, is that you cannot force someone to undergo treatment. Family members can encourage recovery, but ultimately, the decision to seek therapy is up to the individual.

When considering including an addicted loved one in an estate plan, it is helpful to remember that estate planning can be uniquely tailored to the needs of each family and individual. Here are some points to keep in mind as you try to fit a drug- or alcohol-dependent person into your plan:

• You do not have to disinherit them. While you may have concerns that any money or property you leave to a person with an addiction could not only be squandered but also contribute to their self-destruction, there are ways to provide them an inheritance that does not involve giving them direct access to it.
• Be cautious when relying on a sibling or relative to care for a family member experiencing addiction, manage an inheritance on their behalf, or help them get treatment. Addiction often takes an emotional toll on a family. A windfall could further heighten emotions, lead to disagreements, and result in an explosive situation that causes discord among family members. And most people agree that maintaining family harmony is essential for their estate plan.
• If you have an underage child battling addiction, you can name a guardian in your will to manage their financial affairs for them until they come of age. However, guardianship ends once they are legally adults, so this is a short-term solution. A better solution would be to have their inheritance held in trust and appoint someone to manage their money and property until they reach an age you specify or a particular trigger event occurs.

Planning a Trust for a Loved One Suffering Addiction

A trust does not guarantee that an addicted person will be protected from their own bad decisions, but it can be structured in a way that helps ensure that an inheritance is used to their benefit and not to their detriment.

The Instructions Can Be Tailored to Meet Your Loved One’s Needs Without a Windfall

A trust allows you—the trustmaker—to set the terms for beneficiaries’ use and access to trust funds. The terms can be as specific as you want and may include provisions specifically designed to tackle addiction. For example, the trust could include the following types of terms:

• The inheritance must be used to pay for treatment.
• There are incentives to ensure that the beneficiary gets the help they need.
• Distributions cannot be made until the beneficiary completes rehab, passes a random drug test, or, in the case of a relapse, maintains sobriety for some time.
• If the specified incentives are not met by a specific deadline, the trust’s accounts and property will pass to a different beneficiary or a charity.
• Trust funds may be used to pay for living expenses since many people with a substance use disorder have accompanying money problems. A particular type of trust can be set up for this purpose if we need to ensure that your loved one maintains access to means-tested government assistance or can apply for it in the future.
• The trust can last for years or even a lifetime or terminate upon full rehabilitation, at which point the beneficiary takes control of their inheritance.

Choose the Trustee Carefully

Selecting a trustee is just as crucial as the provisions of a trust created for a beneficiary who suffers from addiction. The trustee should act in the beneficiary’s best interests while preserving family harmony. When selecting a trustee, consider the following:

• The trustee you choose to manage the trust on behalf of an addicted loved one can be given complete authority about how to use the funds (a discretionary trust).
• The trustmaker can provide some guidance for distributions that address substance abuse concerns, such as requiring the trustee to pay third parties directly for approved expenses rather than giving funds for such expenses directly to the beneficiary.
• If necessary, the trustee could be given direction or permission to communicate with other family members to coordinate treatment and track recovery.
• The trustee can be a member of the family or a professional (e.g., an attorney or a trust administration company). If you are concerned about maintaining family harmony, you may want to consider appointing someone other than a family member. It is also possible to have co-trustees. Further, backup trustees should be named if the original successor trustees are removed or can no longer serve in their role.

You Are the Only One Who Can Protect Your Loved One

A final consideration about planning for an addicted loved one is what can happen if you fail to plan.

Without an estate plan, the unknowns can be more significant and consequential. The court will rely on state law to determine who gets your money and property, how much they will receive, and when. Your loved one may have a lump sum of money and no restrictions. This default plan does not address the underlying addiction problem. And if your loved one is not a family member, they may not receive anything from you if you do not put an estate plan in place.

Discuss Estate Planning Strategies for a Beneficiary Suffering from Addiction

You might feel torn between a desire to help a person with an addiction in your life and ensuring that your hard-earned money is put to its best use after you have passed away. Or maybe you have been your loved one’s rock, helping them stay sober and avoid relapse, and want to continue doing everything you can for them for as long as you can.

Addiction is often a lifelong struggle. To make a plan that provides addiction assistance for someone you care about, even after you have passed away, book a Discovery Call.

^[1] HHS, SAMHSA Release 2022 National Survey on Drug Use and Health Data, SAMHSA (Nov. 13, 2023), https://www.samhsa.gov/newsroom/press-announcements/20231113/hhs-samhsa-release-2022-nsduh-data.

^[2] Id.

^[3] Christopher M. Jones et al., Prevalence and Correlates of Ever Having a Substance Use Problem and Substance Use Recovery Status Among Adults in the United States, 2018, 214 Drug and Alcohol Dependence 108169 (2020), https://www.sciencedirect.com/science/article/abs/pii/S0376871620303343.

^[4] Barriers to Addiction Treatment: Why Addicts Don’t Seek Help, Am. Addiction Ctrs. (Jan. 30, 2024),  https://americanaddictioncenters.org/rehab-guide/treatment-barriers.