Q: How can I protect my estate and still provide for a drug addicted family member?
A: There are a few options available; however, a trust is one of the best options when estate planning for addicted relatives. There are several forms trusts to consider and each has pros and cons. A trust will enable you to put spending authority in the hands of a trustee who will control any reckless spending by the addicted relative. This can prevent that relative from wasting funds and can prevent them from using funds to purchase drugs, alcohol or harmful items.
Spendthrift clauses in trusts are also valuable tools because they can be utilized to provide necessary funds for things such as medical care, food, and shelter to your addicted relative, without allowing the relative to spend anything additional. This enables you to offer support, even after you are deceased.
Additionally, trusts typically protect the funds in the estate from creditors. If the funds are in the trust, creditors cannot reach them. This is ideal in instances where your relative may be making poor financial decisions while under the influence of drugs or alcohol.
In some cases, you may be able to set up a discretionary spendthrift supplementary needs trust, which enables your relative to qualify for needs-based government benefits (SSI, Medicaid, housing, SNAP, etc.), while offering the other support and benefits of the trust.
Nina Whitehurst agrees with this answer
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