You’re planning ahead. You want to make sure your loved ones are taken care of after you’re gone. And you may wonder what will happen if your child or loved one stands to inherit some or all of your assets you’ve accumulated over the years.
Unfortunately, drug and alcohol addictions are all too common in today’s world. According to a report published by Substance Abuse and Mental Health Services Administration (SAMHSA), 18.7 million people aged 18 or older had a substance abuse disorder in 2017. Three in four struggled with alcohol abuse. Three in eight struggled with illicit drugs. It’s a very serious situation.
An addiction trust allows for assets to be left to your child or loved one, but with certain strings attached. Addiction trusts can be drawn in a number of ways, but one of the most common strategies employed is to word the trust in a way that incentivizes your loved one to get treatment before any assets are provided. An addiction trust usually requires a person to submit to periodic drug and/or alcohol testing to provide the trustee with a factual basis before distributing any money to that person.
Most addiction trusts will allow for distributions of assets to be used for certain services that can assist them to get clean. These services can be interventional in nature which can include counseling and rehabilitation. The whole goal of these types of trust is to make a larger allocation of assets available to that person if they seek recovery and treatment. If this happens within a certain timeframe, then the trustee can be allowed to distribute the allocated amount, whether it is through an outright gift to that person or by staggered distributions over time.
You want to make sure your loved ones are taken care of after you’re gone. No matter the situation, with proper estate planning you can protect not only yourself, but also your hard-earned assets. With an estate plan in place that fits your specific needs and situation, you can protect your loved ones after you are no longer here to offer the protection yourself.
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