If you have a child who has a serious mental illness, drug addiction, alcoholism, a gambling problem or some other disability that prevents him or her from consistently managing his or her own finances, how do you plan your estate — especially if you have a lot of wealth to pass on?
Experts recommend that you take the following steps, even though they may prove difficult to do:
- Acknowledge that your child has a long-term problem that won’t get better with time. He or she may even have long gaps of stability — but those can be broken down by stress. Your death, in fact, could trigger the sort of stress and uncertainty that could set off a manic or depressive episode of a bipolar disorder or cause a long-controlled drinking problem to resurface.
- Consider the benefits of a special-purpose or special-needs trust. While similar in some ways (they both can be written in a way that will allow your child to receive government benefits for the disabled, like health care), they differ significantly in others. A special needs trust provides for extras that your child’s disability benefits might not. A special purpose trust can provide your child with a more comfortable lifestyle, such as the kind he or she would have enjoyed had there been no issues involved preventing you from simply leaving him or her your assets.
- Recognize that by setting up a professionally managed trust that you are making things easier on other family members. For example, if your only other choice to manage a trust is your child’s brother or sister, do you really want to put that burden on him or her? If your child with the illness suffers a relapse, he or she might lash out at the child with all the control over the finances.
If you have an adult child who suffers from mental illness, drug addiction, alcohol addiction or some other issue that makes his or her ability to handle financial matters unpredictable, an attorney can help you learn more about your legal options when it comes to including him or her in your estate planning. Our firm has experienced probate and estate administration lawyers who may be able to help.