Dealing With A Problem Child In Your Estate Plan
As parents, we want the best for our children, and work hard to provide them what they need to be successful in life. Unfortunately, despite these best efforts, there are situations in which our children make poor choices or engage in dangerous behaviors that puts their own or other lives in jeopardy. These situations are challenging emotionally as well as financially, as parents often get caught in the trap of having to support adult problem children or are called on to help them when the child is in trouble. In terms of estate planning documents, there are often hard choices to be made regarding how you will provide for them after you are gone. If you are dealing with this type of situation, it is important to understand your options before making a decision that could impact both you and your heirs, both now and in the years to come.
Using Trusts To Encourage Positive Behaviors
Many parents struggle with the pain of having an adult child with alcohol and drug issues, or those who engage in reckless and dangerous behavior, such as criminal activity or sexual promiscuity, for example. You may have spent many sleepless nights worrying about the situation, as well as vast sums of money bailing them out of trouble or trying to get them the help they need. The last thing you want is to leave them a sum of money that could potentially end up being wasted or even contribute to their problem. According to a New York Times report on inheritance issues with problem children, establishing a trust is often a good way to address this situation, allowing you to place restrictions or conditions on how money is used or spent. Options available with a trust include:
- Setting aside sums that are strictly for educational purposes;
- Restricting how the money is spent or under what conditions;
- Providing financial incentives for responsible behavior or for getting treatment;
- Designating third parties to oversee funds and how they are spent.
If you have multiple children, it is often in everyone’s best interest to designate an impartial third party to manage the trust who is not related or emotionally involved in the situation. Having more responsible children administer or oversee funds can put them in an awkward position and cause rivalries that only aggravate the situation.
Things To Consider Before Disinheriting Your Adult Child
It is not uncommon for parents of adult children with serious behavioral issues to consider leaving them out of their will entirely. If this is an avenue you are considering health and wellness website, the Balance offers these suggestions:
- Do not use disinheritance as a threat to coerce good behavior. It generally does not work.
- Clearly state your intentions in your will. It is not enough just to not include them. You need a line specifically saying that it is your intention to exclude them from your will.
- Do not forget about designations on insurance policies and bank accounts. If they are listed as beneficiaries on these accounts and you truly do not want them to inherit, you will want to make the appropriate changes.
We Can Help You Through This
At Cavallo & Cavallo, we understand the difficult choices that can arise when dealing with adult children. Our experienced New York estate planning attorneys are here to offer you the compassionate, professional legal service you need to guide you in making the decisions that are right for your family.
Resources:
nytimes.com/2011/09/03/your-money/estate-planning/using-an-inheritance-to-teach-your-problem-child-a-lesson.html
thebalance.com/considerations-before-disinheriting-child-3505372
