Trusts for Children, Part 6 – What If a Child is Disabled or Addicted?

The First Step for Trusts for Children

Congratulations on taking the big step to ensure that the young ones in your life are cared for into the future considering creating a trust for children.  We are sure that this will give you peace of mind and security.  Keep reading to learn more about backup provisions that will ensure that both your money and your children are cared for if they are disabled or suffer from addiction.

What if One of My Children Becomes Disabled?

If your child becomes disabled, the trust contains provisions that allows the Trustee to set up a special needs trust for the benefit of your child.  This will protect any federal benefits while also ensuring that there are funds to fill in the gaps.

Read more about Special Needs Trusts in our blog post.  (link on the title)

What if One of My Children Becomes Addicted?

If your child becomes addicted to alcohol, marijuana, or illegal substances, then the Trustee also has the discretion to continue to hold the money in trust past the age that you said for termination.  This helps protect the person from squandering the money.

The Trustee can require that the person undergoes rehab and random testing to prove that they are no longer using before distributing.  The Trustee can agree to use the trust funds for those services, too.  In the meantime, the Trustee can ensure that they have a place to live and are safe by paying expenses directly to the provider (e.g.: rent to the apartment complex) and not give the money directly to the child.

What Happens if the Money Stays in Trust?

The same terms of the trust will continue to apply unless a new or special needs trust has been created.  The Trustee can continue to pay for housing and services for your child so that they have a safe place to live.  The Trustee can also cut off all funding if they think that is the best choice in the circumstances.

Learn More About This Topic

There are far more details and possibilities of what a trust can do for you and your family.  Are you ready to get your trust for children written?  Contact us today to schedule a consultation with an attorney for confidence in your future.

There is far more to learn about trusts for children.  See the following continued series for more information:

Part 1: How Does a Trust Work?

Part 2: Distributing Trust Money

Part 3: Whom Should I Choose as Trustee?

Part 4: Leaving Instructions for the Trustee

Part 5: How Long to Leave the Funds in Trust

Part 7: What if I Want to Change My Trust?

Want to learn more?  Check out these other resources.