Florida Elder Law & Estate Planning Blog

Estate Planning When Your Heir Has A Drug Addiction

If you have a child, grandchild or other loved one who is suffering from a substance abuse problem, your situation is far from rare. Over 20 million Americans are addicted to alcohol or illicit or prescription drugs. Many others have behavioral addictions such as gambling. As a result, you and your family may have spent years in turmoil and many dollars trying to help your loved one recover.

Parents and grandparents in this situation often agonize over how to include their addicted heir in their estate plan, or wonder if they should just disinherit them. They love the addicted individual but recognize that it can do more harm than good to give an addict a lump sum of money or assets that can be liquidated for cash.  They fear, justifiably, that the person will end up using an inheritance to purchase drugs and quickly whittle the money down to nothing. The clients’ other children may also weigh in on their parents’ estate planning, often urging parents to exclude their problem sibling.

Some clients choose to disinherit the child or grandchild; they are resigned to the situation and are at peace with their decision. If that is your decision, our attorneys will advise you  on how to go about it. Steps should be taken to reduce any opportunity for your disinherited child to create problems for your other beneficiaries. You can read about strategies for disinheriting an heir here. You should also check to be sure that the disinherited child is not named as a death beneficiary on your brokerage and bank accounts, or on your life insurance policy.

Other parents and grandparents seek a different approach. They want to provide for the addicted child, but want to place restrictions on how the child’s inheritance is used in order to protect the child from his/her own  poor choices. Fortunately, this goal can be accomplished by creating a trust that is properly structured with certain safeguards. Your estate planning attorney can discuss the details with you and set up such a trust. Below is a summary of how it would be structured and managed:

  • You name your child as beneficiary of the trust and set aside funds that will go into the trust.


  • You name a trustee who will manage the assets and distribute monies to the child. Your choice of trustee is critical because in all likelihood your drug-addicted beneficiary will resent the trustee who controls the purse strings. We know of many cases in which a trustee has been relentlessly pressured and even threatened by an addicted beneficiary. This is why it is almost always a bad idea to make one of your other children the trustee. It is better to name a third-party trustee such as an accountant, a lawyer or a bank. The latter arrangement will involve trustee fees, but the advantage is that a third party trustee is far less likely to be pressured by an addicted child or to succumb to such pressure.


  • The extent and nature of the controls you place on distributions are up to you. You may want to allow your trustee to pay only for the addicted beneficiary’s room and board, education, medical care, drug counseling and rehab programs. Payments should be made directly to the service providers, so the child cannot get his hands on the money. Or you may give the trustee broader discretion. You may require the trustee to use only the income in the trust, or to invade the principal under certain circumstances. The trust should be sufficiently flexible to allow for changing circumstances.


  • You can also build “carrots” and “sticks” into the trust that may foster healthier behavior. For example, as a carrot you may direct your trustee to release additional funds to the beneficiary on the condition that he regularly attends drug counseling sessions. Such a condition would of course require the child to provide a health care release to the trustee so that his attendance can be monitored. This arrangement could also be a stick: if the child misses a certain number of counseling sessions, the distributions are reduced. If the child has proven himself to be recovered and that recovery is documented over a significant period of time – for example, five or ten  years – you could direct your trustee to release a chunk of the principal to the beneficiary. You may also want to build in monetary incentives if the beneficiary accomplishes certain goals – for example, graduates school or maintains a steady job for a certain number of years.


  • You can also include provisions for any funds left in the trust when your beneficiary passes away. Those funds could be distributed to the trust beneficiary’s own heirs if there are any, or to your other children or grandchildren.


Drug addiction is a difficult problem to conquer and a frustrating one for families. Your estate plan can provide for your loved one in a manner that does not  contribute to the problem, or may even nudge him/her closer to recovery. Call The Karp Law Firm at (561) 625-1100 to set a consultation to discuss your estate planning options.