How to Create a Trust for Children With Drug Abuse Problems
Jan. 24, 2023
When creating a trust for a child with drug abuse problems, it is important to consider the potential consequences of their addiction. While parents may have the best of intentions in providing an inheritance to their children when they pass away, it is possible that the money or assets could be at risk if the child has a substance abuse problem.
In order to protect your assets and ensure that they are used as you intended, there are certain considerations you should make when creating a trust. Contact a skilled attorney to assist you with estate planning if your child has a history of drug abuse or misuse. The estate planning attorney at the Law Office of Rodney Gould helps clients protect their legacies and ensure that their wishes are honored in Los Angeles, California, and other parts of the state, including West Hollywood, Beverly Hills, Sherman Oaks, and Studio City.
Possible Inheritance Concerns for a Child With a Drug Problem
When creating a trust for someone who is experiencing drug abuse issues, some of the primary concerns include misuse of funds or assets, overdosing on drugs due to overindulgence, and loss of funds or assets due to debts incurred from buying drugs:
Misusing funds or selling assets to buy more drugs. Misuse of funds or assets may include using them to purchase more drugs or selling them off to pay for them. According to the National Center for Drug Abuse Statistics, 50% of teenagers have misused a drug at least once.
Overdosing due to access to significant funds or assets. Overdosing can occur if the child has access to large sums of money and decides to use it all at once for excessive drug consumption.
Loss of funds/assets. Loss of funds or assets can occur if the child accumulates debt from buying drugs and creditors come after those assets.
Creating a trust for a child with drug abuse problems requires extra consideration in order to ensure their safety and that your estate remains safe and secure until it is passed on according to your wishes. By selecting trustworthy trustees, requiring regular financial reports, and imposing withdrawal limits on distributions from the trust fund, you can help protect your hard-earned assets while still providing an inheritance for your loved ones when they need it most.
What Are Spendthrift Trusts and How Do They Work?
In general terms, a spendthrift trust is set up to protect assets from being spent in an irresponsible or reckless manner (e.g., when a child has drug abuse problems). This type of trust typically includes language that prevents the beneficiary (in this case, your child) from accessing the assets held in the trust until they reach a certain age or stage of life.
The trustee—the person responsible for managing the trust—has complete control over when and how the funds are distributed, which helps to ensure that your child’s money won’t be used in ways that could potentially exacerbate their struggle with drug abuse.
Spendthrift trusts offer many benefits when used in conjunction with other forms of estate planning and asset protection strategies. For example, these trusts can help prevent creditors from seizing your child’s assets if they get into financial trouble later in life. Additionally, if you have concerns about how your child might handle large sums of money, you may want to consider using a spendthrift trust as part of your estate plan. This will give you peace of mind knowing that their inheritance will be managed responsibly.
How an Attorney Can Help
An estate planning attorney can help when you are creating a trust for someone who has drug abuse issues. They can make sure that your money or assets are used the way you want and stay protected from unwanted incidents like misuse of funds, overdosing on drugs, or debt from buying drugs. An estate planning attorney will know what to do to help keep your money and loved ones safe.
Legal Counsel You Can Trust
If you are considering creating a trust for your child with drug abuse problems but have concerns over the potential financial and health risks, consult with an attorney. The estate planning attorney at the Law Office of Rodney Gould helps clients understand their options for protecting their assets from potential misuse, especially when their beneficiaries have substance abuse problems. Contact Rodney Gould’s office in Los Angeles, California, for a free case evaluation.