People establishing estate plans often create custom arrangements based on the needs of their beneficiaries. Frequently, they set aside property that they believe a beneficiary may find meaningful or useful. They may also order the sale of assets to provide their beneficiaries with financial support.
Occasionally, testators may worry that an inheritance could lead to misconduct and other issues. If a family member struggles with substance abuse, they could theoretically use whatever they inherit to purchase drugs or alcohol. Most people don’t want to contribute to a loved one’s self-destructive personal habits. A trust allows a testator to leave an inheritance for a loved one dealing with addiction without fueling their addiction.
Trusts can limit the use of an inheritance
When a beneficiary receives an inheritance directly because of a will, they usually have immediate and total control over those assets. They can spend, sell or give away their inheritance as they wish.
When an inheritance comes from a trust, there may be restrictions on the use of the funds. Those leaving resources for a person with substance abuse challenges can create a trust to protect their beneficiaries.
They may want to specifically require that a trustee make distributions directly to payees instead of to the beneficiary to prevent the misuse of inherited resources. They can impose additional restrictions, possibly by limiting the use of trust resources to certain types of expenses, such as medical costs or educational expenses.
Establishing a trust can be a viable alternative to completely disinheriting a loved one because of a substance abuse disorder. Exploring different solutions for personal estate planning concerns can help people ensure their legacy has a positive impact.