BENEFICIARIES WHO ARE DISABLED OR STRUGGLING WITH ADDICTION ISSUES…

present unique challenges for those making Wills.  Typically, will-makers provide outright gifts to beneficiaries except where the beneficiaries are under age in which case the will-maker creates a trust in the Will directing the executor/trustee to hold the gift (usually liquid investments) in trust for the under-aged beneficiary under that under-aged beneficiary reaches a certain age with the executor/trustee having the right to access the investment for the purposes of providing for the care, maintenance, education and benefit of that under-aged beneficiary. 

However, what ought a will-maker do if the intended beneficiary is struggling with addiction or longstanding mental illness issues.  In such cases, a lump sum gift received at any age may be squandered by such a beneficiary or the beneficiary may become a target of unscrupulous individuals.  Another consideration is that some beneficiaries may be in receipt of both Provincial and Federal disability benefits and a lump sum inheritance may compromise the ongoing receipt of such benefits. 

A trust known as a Henson trust set up in a will addresses both the concerns of a beneficiary squandering a lump sum inheritance or having such an inheritance negatively impact that beneficiary’s disability payments.  It is highly recommended that a will-maker seek out a lawyer familiar with Henson trusts when considering whether to include a Henson Trust in his or her will for a certain beneficiary. 

An additional consideration when considering the needs of a disabled beneficiary is who will manage the trust for the disabled beneficiary.  All too often, there is conflict between the trustee and the disabled beneficiary and the trustee can be worn down by the continual demands of a beneficiary struggling with mental illness or addiction issues.  In such cases, it is advisable that a professional trust company be appointed to administer the trust.  Sometimes, will-makers will appoint both a trust company and a family member to manage a trust for a disabled beneficiary. 

In either case, it’s often inappropriate to ask a family member or sibling to take on the responsibility of managing a trust for a child with mental illness or addiction issues whether or not that child accepts his illness and is working towards health and recovery, or is still active in his illness or addiction. It’s often best for both the child as well as any siblings, to appoint an independent third party, such as a professional Trust Company, to take on the role of managing the trust.

If you or a loved one has a spouse or child struggling with mental illness or addiction and wishes to make or update a will, consult Vancouver/Burnaby wills & estates lawyer Andrew Rebane at Resolutions Law Corporation, located near East Vancouver and in Burnaby, British Columbia, Email: andrew@resolutionslawcorp.com or 778-372-7107