When it comes time to think about your inheritance and how it will be distributed to loved ones, you may have various questions. If one of your family members is struggling with the disease of alcoholism or drug addiction, you may have concerns about leaving a portion or all of your inheritance to that loved one without any stipulations, because you do not want your hard-earned money to be squandered.
It’s not that you don’t love that particular family member, because you most certainly do. But you also understand that under the influence of alcohol or drugs, there’s a good chance that poor decisions will be made. You may have already witnessed your family member making such poor decisions with his or her own money. You don’t want this to happen with an inheritance.
What some people do in this situation is to set up a trust fund for their family member who is addicted. A trust fund is a legal agreement between you, a trustee, and a beneficiary. In this case, you would be setting up a trust fund for your family member, and appointing a trustee, or someone that will be in charge of distributing your assets per your instruction.
Who can you set for a trustee?
You may wonder who to use for a trustee. You have several options. You can use a family member or friend that you trust to be the one in charge of the trust fund. Or you may choose to go with a trust company, accountant, or bank that deals with wealth management. They will charge a small percentage, but you’ll be able to know ahead of time that your instructions will be carried out responsibly.
Lump sum or all at one time?
Most people who set up a trust fund for their family members choose to give out the money at installments. For example, you could have your trustee distribute a percentage of the money at certain ages. Perhaps 25% at age 30, 35, 40, and 45. This, of course, helps your loved ones, but does not necessarily enable them.
When you’re dealing with a loved one who is struggling with addiction, you can set up your trust fund based on incentives. These are the types of trust funds that reward the behavior that you desire. For example, you could allot a certain amount of money when your loved one has completed a drug rehab program. You can even allot some money to pay for the drug rehab costs. Or perhaps has a certain amount of clean time, based upon regular alcohol or drug tests. Or you could release a certain amount of money after every year of college that’s completed. These are great incentives for people to follow through with some positive goals for their lives.
Setting up your will
No one really likes to think about leaving this Earth, but the reality is that death will approach everyone at some point. It’s much easier to approach it when you feel as if you’ve taken care of things and prepared for it on the financial end of things. If you haven’t set up a will, consider doing so. It’s best if you do this with a lawyer who can assist you and answer any questions that you may have.
A will and a trust are not the same thing. A will is executed after your death. A trust can go into effect as soon as you create it. It’s best to talk to a legal representative or bank when it comes to deciding exactly what you need for your estate.
Believing the best for your loved one
If a family member is struggling with alcoholism or drug addiction right now, it can feel quite disheartening. After all, when loved ones are in pain, loved ones tend to feel it too. They want the best for them, but they certainly don’t want to enable them.
Setting up a trust fund for someone who is struggling with addiction can help you have peace of mind. Even though you may not see the behavior that you want right now from your loved one, choose to believe the best for them in the future. There are plenty of people, who at some point in their life, recognize their addiction and reach out for help in overcoming it.
Having a conversation with your loved one
If it will make you feel better, sit down and have a conversation with your loved one who is struggling. Let him or her know that you are concerned about their drinking or drugging behavior. Also, let them know that you are creating a trust fund and there will be stipulations when it comes to administering assets upon your death.
This way, they won’t be able to sit around and think they’re going to freely receive this big inheritance and happily go on their way abusing substances. This may even prompt them to really take a look at their behavior and make some changes. You can certainly relate to them that you’ve worked hard for your money, you’ve been wise with it, and you do not want to leave it to someone who will make poor choices or squander it.
Encourage attendance at a drug rehab center
Having a loved one struggling with addiction can be challenging. If you haven’t sat and talked to your loved one about your concerns, do so. Be sure to approach him or her with a loving and compassionate attitude, and simply share from your heart. There are some people who ignore the elephant in the room, so-to-speak, thinking that if they bring up the addiction, conflict may ensue. While that may be true, having a heart-to-heart conversation can also open the doorway for hope.
Addicts are in pain, and most likely stuck. They want freedom, and oftentimes don’t know how to go about getting it. Encourage attendance at a drug rehab center, and let them know that you’re on their side. You support them no matter what, and you’ll stand with them whether they attend or not. Hopefully, they’ll decide to get drug treatment or attend a drug rehab center for their addiction, and go on to create a life that they really love.