How to plan your estate around your “black sheep” child

Many families have adult children who have not taken the usual and typical trajectories in life. They may have gotten derailed at some point due to substance abuse, mental illness or problems with the law.

Regardless of their perceived transgressions and irregular lifestyles, most parents still love their errant adult children and don’t want to exclude them from a future inheritance. Yet, they also don’t want to contribute to their children’s undoing by giving them access to funds they could use to cause harm — to either themselves or to others.

What’s a parent to do?

If you are married to the child’s other parent, it is very helpful to be on the same page about the matter. But often, one parent has been the “enabler” of the black sheep child while the other parent played the role of enforcer.

You cannot dictate what your spouse does with their estate should you predecease them. But there are ways to control the distribution of funds that won’t further your child’s addiction or spendthrift proclivities.

Many spouses leave each other their assets, and when the surviving spouse passes on, the kids then get their inheritance. To avoid a situation where the black sheep child is disinherited entirely or left with a sum of money that can get them into hot water, consider a spendthrift trust provision for that child. What is a spendthrift trust? Spendthrift trusts operate like other trusts do and distributions are managed by a trustee. But the beneficiaries do not have access to the principal.

This is helpful because it allows the black sheep child to inherit from their parents without the parent worrying that access to such largesse will create further problems for their son or daughter. It also protects the principal from being siphoned off by your child’s ne’re-do-well spouse. The trust’s funds are also generally protected from lawsuits, although once the distributions have been made, it’s fair game.

Discuss your concerns now

If you feel that your child might benefit from a spendthrift trust, now is the time to learn more. A Langhorne estate planning attorney can explain your options and help you devise a workable plan.