ESTATE PLANNING NEWS & ARTICLES
The Opioid Epidemic: Using Targeted Trusts
The Opiod Epidemic is back in the news, and is still far reaching in our communities across the country as ever. Every day, more than 115 people in the United States die after overdosing on opioids according to the National Institute on Drug Abuse. In 2016, more Americans died due to opioid overdoses than car crashes according to the Centers for Disease Control and Prevention (CDC).
On the Sept. 15th 2019, Purdue Pharma makers of Oxytocin, filed for Chapter 11 bankruptcy in New York “as part of its framework for settling litigation with multiple states and governments.” explains CNN.com. ” ‘After bankruptcy filings are complete the company estimates it will provide more than $10 billion in funding to address the opioid crisis which will include settlements with 24 state attorneys general, officials from five US territories and the multi-district litigation, the statement said.’ ” But not everyone is happy about the settlement saying it allows the Sackler Family, owners of Purdue, to walk away with their fortune intact and without truly admitting wrongdoing. No doubt over the next months, the legal wrangling will continue.
“From cities and suburbs to rural America, opioid addiction and overdose is the crisis next door,” says opiods.gov. The statistics are scary and show that drug abuse is no longer an inner city, low income issue. Aging parents are now wondering what to do with young to middle aged children who suffer from addiction and addiction related medical disorders. The condition is so common now that estate planners are creating specially targeted documents coined, “opiod trusts” to help these parents.
What is an Opiod Trust?
Many parents face a real dilemma when it comes to their addicted children and how to best care for them. Many fear leaving their kids money because they do not want to fuel a drug habit and see a lifetime of savings and/or hard work disposed of in such a way.
Martin Hagan, an estate planning attorney in Pittsburgh, says he sought out the advice of a substance abuse psychologist. “He basically said the trust should never provide any kind of support to the child. I know that sounds cruel, and it can worry parents … but the way this doctor expressed it is that the name of the game is recovery. The goal is to get that person into recovery and, through trial and error, eventually they might be able to stay clean long-term,” Hagan explains to the TribLive.com’s Patrine Varine.
Tough Love Trust
Therefore, an opioid trust is set up only to pay recovery-related expenses only and directly to the doctor, therapist or other entity to which they are owed. No money or property is ever given directly to the trust beneficiary, a sort of tough love. “You provide other, in-kind benefits,” Hagan says. “Maybe you give them the use of a car, but not the title to that car.”
The key is also choosing a trustee, since drug addicts tend to sometimes behave badly, writes Varine. Choosing a family member is not wise, so third party companies are starting to offer this service now as well, adding social workers or counselors to their teams to help alleviate some of the hostility and other behavioral issues common with addicts.
If you have a family member struggling with this or similar issues and need assistance, my office prepares trusts like this to help families get the answers they need and put the right plan in place for their particular situation.