My path in recovery began when I was starting my third year in law school. As luck (and my higher power) would have it, I was at William Mitchell College of Law, which sits in the center of a thriving recovery community in St. Paul. I was fortunate to find myself in a setting and community supportive of my recovery and, subsequently, I have remained here. Being in a community where recovery is prevalent allows me to open up about being a woman in long-term recovery – both personally and professionally.
As an estate planning attorney who is very open about being in long-term recovery, I frequently meet with families impacted by substance use disorder. Like many of us in recovery, they want to work with a professional who understands recovery – the family dynamic that often exists, the ups and downs of recovery, and the unique concerns and challenges that accompany substance use disorder. It has become a passion of mine to work with these families and serve them in a manner in which they often do not find with other estate planning attorneys.
Over the last 10 years, awareness of substance abuse has been amplified. In 2018, 19.3 million people of ages 18 and older had a substance use disorder, with 7.4 million using illicit drugs, and 14.4 million struggling with alcohol abuse. While there is still work to be done to reduce stigma, our society is becoming more conscious that addiction is a chronic disease. Like many other chronic illnesses, it is not uncommon for relapse to be a part of recovery among those with substance use disorder. About 40-60% of individuals in recovery experience relapse, which is similar to the relapse rate of asthma and hypertension.
When I work with clients who have a loved one impacted by substance use disorder, a common concern is if the individual has unlimited access to their inheritance. Not only could these assets support their addiction, but it could lead them down an even darker path. A colleague of mine experienced this firsthand. Her mother passed away and left assets to her and her brother. Her brother was active in his disease when his mother passed away and was found deceased in a hotel room a few months after receiving his inheritance.
With intentional and well-drafted estate planning, it is entirely possible to leave assets to an individual in a manner that supports their recovery and does not enable their use. One way to ensure that a child or family member is still taken care of in this manner, is to create an incentive trust, or in this context, an addiction trust. What individuals and families are able to do is encapsulate the boundaries and support systems they have in place and pass it on to continue when they pass away, and to continue in future generations. When creating an addiction trust, one has the ability to construct a limiting inheritance, without completely disinheriting the child.
When creating an addiction trust, those contributing should think about the end goal. Does the trust want to focus on rehabilitation of the individual and/or their continued recovery? Does the trust want to fund treatment and medical bills, or distribute a monthly allowance to provide basic necessities for the individual so long as they are active in their recovery?
I generally start by asking clients about the ways which they support (financially or otherwise) their loved one when they are active in their recovery and/or when they are active in their disease. For example, some families allow the trust to pay for items or make distributions generously when the beneficiary is active in recovery, but only want the trust to pay directly for recovery services should the individual experience a relapse.
There are many options that exist for this type of planning. Such examples of trust provisions, or goals, could be (but are not limited to) any of the following:
- Outright distribution of the assets once the individual has been sober/in recovery for a certain period of time.
- Requiring or allowing random drug tests and/or UA’s to determine their status in recovery prior to making distribution.
- Requiring or encouraging continuous therapy or support groups (such as AA or NA).
- Limiting amount to be distributed to support/encourage the beneficiary in employment and recovery.
- Holding the assets in trust for the lifetime of the beneficiary.
With this type of trust planning, it is important that the planning is thorough and well drafted. The trust document should not only lay out the requirements and guidelines but should also include powers and processes for the Trustee(s) to ensure it is possible to administer. It is also important to choose who will act as Trustee carefully. It may be ideal to name a professional/corporate Trustee, rather than a family member. Working with an experienced estate planning attorney, who also understand substance use disorder and recovery, can empower families to take this intentional and beneficial approach to planning.
I was recently speaking to a fellow traveler in recovery and explaining the trust planning that I do in this regard and he said, “My recovery is strong right now, but I can’t imagine how hard it will be when I lose a parent. I hope I would lean into my program, but you just never know. I am going to tell my parents about some of this!” I was impressed by his level of self-awareness and delighted to realize that individuals personally impacted by substance use disorder also appreciate the value of this type of planning.
Along with serving families directly in my practice, I also work diligently to share this information within the recovery community. It is not uncommon that when I mentioned or discuss addiction trust planning, whether it be to potential clients or other attorneys, they have not heard about this comprehensive approach to planning for families impacted by substances use disorder. I hope this information will help support individuals, and their families, on their path in recovery.
Rachel T. Schromen is an estate planning attorney and owner of Schromen Law, LLC in St. Paul, MN (www.schromenlaw.com). She has been named a Top Three Best Rated Estate Planning Attorney in St. Paul annually since 2018 and voted Favorite Estate Planner by Women’s Press Magazine annually since 2017. Ms. Schromen speaks frequently on the topic of Addiction Trust Planning, including providing training on the topic to attorneys in the Metro Area.