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Estate planning for parents of addicts or alcoholics

9/9/2016 | Kaplin Stewart Blog

The urge to take care of one’s children remains strong in the lives of Pennsylvania parents long after kids have reached the age at which they should be taking care of themselves. For parents who have adult children struggling with addiction, the desire to help them through those challenges can feel overwhelming. Estate planning becomes a far trickier proposition for these families who must balance the desire to provide an inheritance to their child with the need to avoid playing the role of enabler.

One option is to place the child’s inheritance into an annuity. This ensures that the beneficiary will always have a stable source of financial support, no matter what choices he or she may make. However, annuities are inflexible investment options. If the adult child should need a larger measure of financial support, he or she would be unable to obtain additional funding from the annuity. This could prove to be an impediment to seeking treatment at a rehab facility or entering an outpatient drug counseling program.

Trusts offer a greater degree of flexibility but require management. There are professional trust administration services available, but that approach comes at a cost. Some families choose to ask a responsible child or relative to manage the trust and decide whether or not to approve large disbursements. This approach, however, places the family member under a great deal of pressure and can have a negative impact on their relationship with the beneficiary of the trust.

Determining which way to go may not be an easy task. It is important for Pennsylvania residents to remember that estate planning is a very customizable process, and there are solutions to virtually every set of needs. With the right degree of motivation and effort, it is possible to find the best possible fit that allows parents to provide support for their child while also avoiding a scenario in which an inheritance could be squandered.  

Source:, “Try to maintain flexibility in estate planning“, Rick Bloom, Aug. 28, 2016