Estate Planning: Providing for A Beneficiary With Addiction

Over the last ten years I have worked with a number of clients who have children with alcohol or drug addiction.  Unfortunately, this is a growing problem that affects many families in Arizona.  For example, in 2008, an estimated 54,000 children ages 12-17, and 273,000 adults age 26 and older, were dependent on or abusing illicit drugs and alcohol in Arizona.[1] Many parents are concerned about protecting their legacy and have questions about a distribution of their estate to a child with an addiction.  This is a very delicate, but important topic.

First, inheriting a large sum of money by a person with an addiction could have serious consequences.  There are ways to avoid this problem.  You can set up conditions for distribution in your revocable trust.  You can provide that a beneficiary must be sober for a specific period of time, be employed for a certain period of time, undergoes counseling and drug treatment, passes periodic or random drug tests or completes a rehabilitation program.  You can authorize the trustee to stop any future distributions until the person passes a drug test consistently for a certain period of time.  The trustee may also use the trust funds for drug treatment and counseling services for the beneficiary.  There are many ways to insure that your money is used wisely, but all solutions should be tailored to your unique situation.

Second, you need to carefully choose a trustee for your trust.  For obvious reasons, a child with an addiction problem would not be the best choice to be the trustee of your trust or an agent for your durable power of attorney.  Usually, a family member (another son or daughter) can serve as a trustee.  A family member will be able to deal with the emotions and have more understanding and compassion than a corporate trustee.  However, it can create additional tension between the trustee and a child with an addiction.  In this case an independent professional fiduciary might be a better choice.

A well-drafted estate plan with restrictions on distributions can prevent dissipation of your money and save the life of the child with alcohol or drug addiction.  I can help you set up an estate plan for those you love most.

[1] Child Welfare League of America – Arizona’s Children 2011 Survey (

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