The Opioid Epidemic
Sadly, it has become standard to ask my clients whether they have any concerns with a loved one with substance abuse. In the past, this subject was taboo – client’s preferring to keep skeletons hidden. However, today with the opioid endemic unyielding to discriminatory factors such as race, age and wealth, it has developed into an everyday discussion just as it has changed the background of client’s plans.
Last year, President Trump declared a nationwide public health emergency to combat the opioid crisis as statistics show that approximately 142 Americans die every day from an overdose. Additionally, STAT forecasted that within the next decade as many 650,000 Americans will succumb to their addictions.
Clients face unbearable trauma both financially and emotionally when living with a loved one with addiction. Apprehensive over everyone’s safety and their capricious behavior, the inner turmoil experienced when deciding how to deal with their child’s dependence, may lead to upheaval, divorce, and resentment. Sibling’s feel disregarded by parents who continue to finance their sibling’s addictions.
Should you disinherit your child? Will this leave your addicted child destitute and unable to seek treatment after you are gone? Or would they contest your decision? An outright bequest instead? Have they spent their inheritance during your lifetime rather than after you’ve passed? Will this allow them to finance their contest upon your death, resulting in litigation – which can be both costly and lengthy. Others consider leaving monies to the addicted child’s sibling(s) to manage and control. Nevertheless, this can cause a whole host of issues including increased resentment, loss of assets to creditors, mismanagement of funds, refusal to uphold your wishes, bankruptcy, divorce and even death.
Rather than worry about “what if’s”, we recommend the use of a discretionary trust for the addicted beneficiary. The most common distributions are for health, education, maintenance and support but the IRS does not define what this means which can cause disagreement between the trustee and beneficiary. In cases with substance abuse, we highly recommend that the trust remain pure – the trustee has the sole and absolute discretion to make or postpone distributions.
How do you choose a trustee? It is difficult, and many client’s yield when considering a family member. Should you choose a bank or trust company? Many institutions hesitate due to the amount of funds involved but particularly when there is addiction afoot. Rather, consider the use of a trust advisor and trust protector for consultation and administration approval, relieving the burden from the trustee.
Few non-professionals are skilled to deal with the turmoil instability addiction wreaks on a family. Yet, during the course of advising clients, it’s inevitable that we’ll be drawn into this crisis. There is no perfect plan in this situation but by applying the strategies discussed, we can assist in crafting an estate plan to promote future stability and peace of mind. Contact us to see how we will stand by you during this tough time.