Estate planning often serves as a reflection of a family’s experiences. In this instance, estate planning is used to protect the family and individuals with substance abuse problems.
Estate planning attorneys hear all kinds of stories about bizarre family dynamics and difficult relatives. However, the national opioid epidemic is relatively new to the estate planning world. Sadly, it is likely here to stay.
The Pittsburgh Tribune-Review’s recent article, “Pittsburgh attorney sets up 'opioid trusts' for beneficiaries with addiction issues,” reports that the American Family Survey, commissioned annually by the Deseret News and conducted by YouGov, found that 12% of families in 2017 said they had an opioid-addicted relative. Opioid overdoses nationally are the leading cause of death for people younger than 50, according to the Centers for Disease Control and Prevention in 2017.
The opioid epidemic has led some attorneys to get creative and establish what are being called “opioid trusts.” Some folks don’t want to leave anything outright to a child with a dependency issue, because of what can happen to the money.
Estate-planning attorneys are regularly asked to create trusts for beneficiaries with intellectual disabilities, who are entitled to public-health benefits through Social Security or Medicaid and receive supplemental trust payments that add to those. However, the so-called opioid trust is somewhat different.
Parents may be paying for the child’s basic support needs. However, is that money going to buy drugs? If so, have they cut him or her off completely?
With an opioid trust, there’s no support to the child. This sounds cruel, but medical experts say it’s to get the child to embrace recovery. The goal is to get him into recovery and, eventually he might be able to stay clean long-term. An opioid trust is created to pay recovery-related expenses, such as rehabilitation bills, therapist payments and treatment bills. Optimally, the child gets a job. It’s this “tough love” that’s the only way this type of trust will work.
The money is never distributed directly to the beneficiary, nor is any property that could be easily converted into drug money. However, you can give them other, in-kind benefits, like the use of a car—but not the title to the car.
Naming a trustee can be challenging in this kind of situation. This is a situation where a professional trustee, rather than a family member, may be a better choice.
An estate planning attorney will be able to help your family distribute assets through an estate plan that protects the family from the impact of addiction.
Reference: Pittsburgh Tribune-Review (August 21, 2018) “Pittsburgh attorney sets up 'opioid trusts' for beneficiaries with addiction issues”