In this article, you can discover…
- How to navigate leaving assets to someone with an addiction or mental health issues.
- The best ways to plan for your troubled child’s future and inheritance.
- How an estate planning attorney can offer seasoned guidance and make this process simpler.
What Challenges Arise When Leaving Money To A Child With A Mental Illness?
A major challenge can arise when your child is on Social Security Disability, Medicare, or Medicaid for mental health issues. In these cases, the inheritance they receive could disqualify them from receiving those benefits.
Say you leave such a child $100,000. The large amount of money suddenly in their bank account will kick them off their benefits and may be quickly eaten up by medical costs. After the inheritance is depleted, they’re left with no money and no benefits, either.
To navigate these concerns, a “special needs trust” for a child with a mental illness can be established to help protect your child’s inheritance and protect their medical benefits, as well.
What Concerns Can Arise When Leaving Money To A Child With An Addiction Issue?
If you have a child with a drug addiction, you know that any amount you leave them would likely be spent in no time on drugs. This is a difficult reality to face, but options such as a customized trust can help you leave money to your child in a responsible manner, finance their basic needs, and even anticipate possible recovery.
Can Trusts Be Adaptable As My Child’s Needs Or Health Change?
Yes, though trusts should be set up with realistic expectations in mind, too. For example, a child with severe Down Syndrome is not going to recover. There will likely never be a situation where they can handle money, live alone, or not require government assistance.
A special needs trust tailored to such a child will likely be more static, but will still be reviewed every few years to ensure it’s meeting your child’s needs.
On the other hand, if your adult child is struggling with addiction, a trust can be set up with a trustee who can monitor your child’s progress. The trust will provide instructions as to how assets can be used, but can also give the trustee discretion to adapt asset distribution or even terminate the trust and release all funds should your child get and remain sober.
In each case, your estate plans can be reviewed and updated if your child’s needs or situation change. This is true of trusts, wills, and other key documents, too.
Who Should I Choose As Trustee Over My Special-Needs Child’s Trust?
It’s important to select a trustee who knows your child well, is objective, and can make clear-headed, responsible decisions about how, when, and for what reasons to release assets.
While some families assume that a healthy, stable sibling would be the best choice, this option can have serious risks. I’ve seen parents name a responsible sibling as trustee, only to have the sibling struggling with addiction pressurize them with demands for more distributions or greater control.
This can cause incredible amounts of conflict and stress, and it’s best to have a thoughtful, lengthy conversation about family dynamics and possible risks with your estate planning attorney when choosing a trustee.
Still Have Questions? Ready To Get Started?
For more information on estate planning for special-needs adults in Pennsylvania, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (412) 276-4200 today.
Attorney Deborah Lesko is an experienced, diligent estate planning lawyer serving Pennsylvania. Since 1983, she’s helped families with special-needs children plan around serious health concerns, protect assets, and ensure their child’s future is carefully provided for.
Have questions, or in need of caring legal guidance? Reach out to The Law and Mediation Offices of Deborah L. Lesko, P.C., for an initial consultation today.
