Substance abuse is a common problem and most families have at least one person who is struggling with it. If you have someone like this in your family, and you plan to leave this person a sizable inheritance, the situation presents a unique estate planning challenge: How do you leave money to someone with a substance problem while preventing the individual from spending it on a potentially life-threatening addiction?
Many Tennessee estate planners might simply choose to leave their assets to someone else. However, through the creative use of a trust, you might still be able to reserve assets for your loved one without endangering his or her life.
A trust can be organized in many different ways -- and trust creators can write the instructions associated with the trust in such a way as to prevent a beneficiary with an addiction problem from having full, unfettered access to the funds. Perhaps, for example, you will create a spendthrift trust that only provides a limited income to the addicted person each month. Alternatively, you might strictly limit the use of the trust to purchase items for the beneficiary like food, clothing and housing. When drafted the right way, the trust can place a trustee in charge of the dispensation of the assets in a way that adheres to specific instructions like this. It might even be possible to place terms in the trust that require the beneficiary to undergo regular drug screenings to continue receiving financial benefits.
Ultimately, a trust can provide a lot of creative solutions for a family that is worried about an heir with an addiction problem. Make sure to fully explore all the trust options that may be available to you.