Trusts are useful for those thinking about their legacy when they die. They can help people provide structured support for their loved ones while they are still alive. Some people establish special needs trusts for family members who have debilitating medical conditions.
Others decide to use trusts to structure the inheritance or financial support of an individual with a substance abuse disorder. There are a few key reasons to consider using a trust to protect resources intended to support an individual with a substance abuse disorder.
Preventing the abuse of funds
People addicted to alcohol or other drugs may steal and commit other crimes to try to access their substance of choice. Having access to a large bank account or a lump-sum inheritance could lead to irresponsible and even dangerous decisions. Allowing a trustee to manage resources can prevent the abuse of those funds while still ensuring that the vulnerable person has support.
Protecting resources from creditors
People with substance abuse disorders may end up in debt. They could also face litigation if they injure other people or commit crimes because of their addictions. Any property directly owned by an individual facing collection activity, divorce or litigation could be vulnerable. Assets held in a trust can continue to support an individual even if they face aggressive collection efforts or lose a lawsuit.
The right choices can allow people to support their loved ones without necessarily supporting their bad habits. People in many challenging circumstances may find that trusts offer them more control and allow for optimal protection of beneficiaries, especially when compared with a simple will. Funding a trust can help a testator support a loved one who is navigating a complex situation.
