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Teenager buying molly drug during spring break party

How to Create a Trust for Children with Substance Abuse Problems

Redding Law Office March 27, 2023

Anyone who has children knows that as a parent, you spend a lot of your time worrying about your child’s health, safety, and overall happiness. This is true whether you have a baby, teenager, or adult-age son or daughter. You also know that you'll do anything to help your child no matter what they’re going through, and this includes serious issues with substance abuse. This comes up frequently with parents who want to pass down assets but are concerned about protecting the inheritance of children with a drug problem. 

If you’d like to speak with an estate planning attorney about these concerns and how to address them, reach out to Redding Law Office. The firm is proud to serve families in Southlake, Texas as well as Tarrant County and Denton County and surrounding cities of Flower Mound, Keller, and Colleyville.  

Possible Inheritance Concerns for a Child with a Drug Problem  

Even though we want to help our children, we also know that simply handing them money may only contribute to their addiction issues. This could mean that they’ll just use the money to feed their habit, or they’ll use physical assets and sell them to get money for drugs. There are also real concerns about overindulgence that could lead to overdosing should they receive a windfall of money. Lastly, many drug users have to go through illegal channels to purchase their drugs and if they’re already in debt to these dealers, or they’ve gone into debt on their everyday obligations like rent, utilities, or loans, it’s possible that any distribution they did receive would be automatically taken from them. 

Spendthrift Trusts & How They Work  

One way parents address estate planning for children with a drug problem is by establishing a spendthrift trust. This is a type of trust that sets up certain restrictions about how and when the beneficiary can access their inheritance. To do this, the assets will be held and administered by a trustee who will be responsible for distributing funds according to your directives. The beneficiary themselves has no direct access to the trust and all transactions must go through the trustee. The limits you put on the trust will vary depending on your wishes and the needs of your child. For example, your trustee may only distribute a certain amount of money each month to your child, or they may be directed to only use the funds to pay for certain expenses like rent, utilities, car payments, or college tuition.  

The Trustee’s Role  

Of course, with a plan like this, the role of your trustee is paramount. This means you need to choose someone you can count on not only to execute the trust according to your wishes, but who will also be able to make informed and reasonable decisions about future situations. You may wish to give your trustee some leeway with the distributions and allow them to use their own best judgment if more or less money should be given. For example, if your child completes a drug treatment program and proves they can remain clean, your trustee may decide to give them more responsibility with how they use their inheritance. Your trustee can be someone you and your child know personally such as a family member or close friend, but you can also opt to hire a trust company to fill this role. No matter what direction you choose, the trustee will play a key role for years to come. 

Personalized Legal Counsel: Redding Law Office  

If you’re in the Southlake, Texas region and would like to learn more about your options for setting up a spendthrift trust, reach out to an attorney at Redding Law Office for experienced yet compassionate estate planning help.