Deciding how to leave assets to family members can be difficult enough as it is, but there are certain factors that can complicate things. These can be things like an heir’s age, maturity and responsibility when it comes to financial matters. However, estate planning when a family member is struggling with addiction can be especially difficult.
In general, it might not be advisable to leave a lump sum inheritance to a Tennessee family member who is either currently dealing with an addiction or has in the past. This does not mean that this person has to be left out of an estate plan altogether, though. An incentive trust may be a good solution to this particular problem.
An incentive trust operates by providing incentives for certain positive outcomes. In the case of an heir with an addiction, this could mean submitting to randomized drug tests or meeting employment requirements. A trustee must gauge the beneficiary’s adherence to the trust’s terms and can then act with a certain level of discretion. As such, the chosen trustee must be prepared to deal with potentially difficult situations.
Incentive trusts are not appropriate for every situation. These trusts can only function if the beneficiary not only agrees to the terms, but also provides a waiver that would allow both trustees and advisers to access the beneficiary’s health care information. Since estate planning can be difficult enough as is, folding in another complicating factor can be understandably overwhelming. Because of this, many individuals choose to seek guidance from Tennessee attorneys who are well-versed in the estate planning process.