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Lump sum inheritance and addiction issues.2018-09-12T14:52:12+00:00

Project Description

Case Study

Lump-sum inheritance could be harmful to adult child with addiction issues

Ensuring that an inheritance really benefits those it was intended to help can become extremely complicated when one or more of those involved is dealing with an addiction.

Patently, there are significant factors that must be taken into consideration if behaviour and life-style is being dictated by an addiction that threatens to undermine the long term good an inheritance is hoped to achieve for the beneficiary or beneficiaries.

Action taken

Preparation of Wills with Discretionary Trusts.

Result

The beneficiary with addiction issues can be provided for from the Trust, without the risk of a lump-sum payment being used to feed their addiction.

How this helped

When S & B approached us with concerns about leaving any large inheritance to one of S’s children, we discussed with them in a sensitive and calm way, what the reasons were for their fears.

During those discussions it became clear that they had real worries about one of S’s adult children, W, who had a history of addiction which has also led to mental health problems.

It was established that even when W is well, she is still not very good with money and this was a major anxiety for S & B as they were understandably concerned that inheriting a large sum of money from their estates would put W at risk of falling, once again, into the behaviours associated with her addiction.

As a result, they did not want to leave W any outright inheritance but still wanted to ensure that she was not left destitute and unable to support herself with all the resultant problems that could trigger in her life.

Using the expertise and experience of the team at Roche Legal, we formulated a strategy to address those particular concerns and discussed the various options for their Wills with S & B.

We advised a Discretionary Trust should be included, which allowed W to be one of several possible beneficiaries. As no beneficiary of a Discretionary Trust has any absolute right to the money in the Trust, W would not be able to demand a particular amount or share.

This removed the risk of a large sum being given to her and fuelling her addiction. The Trust also allowed for money to be paid to W if she needed it or, for example, to be paid direct to a landlord, care facility etc… as required.

This aspect of the strategy was designed to help the Trustees ensure W was safe, housed and not left struggling. This allowed the clients to be assured that W would not be put at risk of being negatively affected by her inheritance and could be supported by their estates after they died.

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