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Estate planning when an heir might have addiction issues

Texans who are taking the necessary steps with estate planning will have different concerns depending on the circumstances. One issue that is growing problematic not just for society in general, but for those who are thinking about their beneficiaries, is drug addiction. The opioid crisis is something that is becoming a national epidemic and more and more people are thinking about this when they craft an estate plan. People who have heirs who they believe might already be involved in drugs or could be susceptible to the temptation should know how to account for this when they formulate their end of life documents.

Each day, an estimated 142 people are dying from a drug overdose. Because of the concerns, people are accounting for addiction in their estate plans. Since addiction can result in emotional and financial ruin not just for the addict, but for the family that is trying to help that person, there are several estate planning choices that can be useful, albeit difficult. Disinheriting the person can be perceived as a "for their own good" strategy. This might seem cruel, but if the alternative is leaving a significant estate to a person who will use it for drugs, it might be preferable. Telling the person that this is a possibility might be a way to inspire them to get treatment.

An outright bequest is a gift. The person might leave the beneficiary a certain amount that is less than it otherwise would have been. This can be dangerous if the person is an addict as leaving available funds runs the risk that it will be used for drugs. It also leaves the person the ability to issue a challenge to the estate plan. The funds can be left to a sibling instead of the addicted person with the stipulation that it is used for the addict's care. This too can cause problems if the sibling mismanages it, does not follow the wishes of the testator, or has other issues that render the estate depleted and unable to help the addict.

Various trusts could be better than the above options. For example, a discretionary trust can be created that will hinge on the addict remaining free of drugs. When planning for the distribution of assets, the goal for the majority is to make certain that their loved ones are cared for. People who have issues with drugs should be accounted for amid the beneficiary concerns and speaking to a lawyer who understands complex estate planning can help with creating a viable strategy.

Source: wealthmanagement.com, "The Opioid Crisis' Impact on Wealth Planning," Kevin L. Johns, Dec. 5, 2017

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