Addiction can complicate estate planning.
Families undertaking estate planning must consider various factors when determining and outlining their wishes.
Some adult children may be highly capable and have healthy relationships with other family members.
These adult children may work on their own or even in the family business.
Other adult children may have little to no impulse control and have left a trail of trouble in their wake.
According to a recent Market Watch article titled “We have $13.5 million and 3 kids, but one is an addict. How do we fairly divide our estate?”, families navigating estate planning, as well as circumstances related to an adult child with addiction struggles, may find themselves unsure what to do.
The article tells the story of a family system impacted by an adult son with addiction issues.
Despite years of spending significant funds on sober-living houses, rehab, and purchasing a home for this child and his first wife, the oldest son continued to spiral and ended up living in a motel with his second wife.
The parents have ended their financial support to their son, but not their emotional and relational connection.
Both parents speak often with their son and still love him deeply.
The parents have also financially supported the needs of their other two children.
A 26-year-old daughter lives in a home they purchased for her and is close to her parents.
The youngest son is 23 years old and has found professional success working for one of the family businesses, while also benefiting from the gift of a home and a vehicle.
The parents are uncertain about how they want to distribute their assets among their children in their estate plan.
They have one business valued at $2 million, another business valued at $8 million, a home valued at $1 million, and approximately $2 million in investment accounts.
The youngest son, who works for one of the businesses, is considering purchasing it.
The parents want their daughter to feel equally supported and also want to provide for a young man they consider a son.
How do the parents accomplish their desire to be fair to their children with and without addiction issues?
The family can work with an experienced estate planning attorney to create a strategic plan for fairly dividing their assets.
Addiction requires more structured and thoughtful estate planning.
To best accomplish this goal, the estate plan will likely involve business transfers and at least one trust.
Although the son with addiction is the most vulnerable, his shares can be protected both "for" and "from" him.
The parents would benefit from creating an irrevocable trust with a professional trustee for the benefit of their oldest son rather than leaving a direct inheritance.
Setting up a substance-abuse protective trust or a discretionary trust allows the parents to require evidence of sobriety or compliance with Alcoholics Anonymous or Narcotics Anonymous meeting attendance to receive payments of funds.
Yes, this is tough love stuff.
Providing for the man who is not related by blood can be accomplished by leaving him a quarter of the estate or even a smaller portion than that of the three biological children.
By using a trust and a professional trustee, the parents could help prevent resentment toward this young man from the biological children.
To provide for the youngest son, the parents can sell him the business.
To avoid the IRS treating this as a gift, the son should pay the business's fair market value.
How can the son buy the business?
Business transfers among family members are often made through family limited partnerships, grantor-retained trusts, installment sales, or valuation discounts.
These can reduce the impact of taxes when properly structured, but often must be implemented over several years.
One of the greatest challenges of transferring the business to the ownership of one son is protecting the shares of the estate for the other children.
To accomplish this, the other children will be included as beneficiaries of the retirement accounts and will be gifted the remaining assets, including stocks and real estate.
Although children are not "owed" inheritances by their parents, families choose to pass along wealth to their progeny for various reasons.
For those who want to love and support their children with fairness and objectivity while navigating complications surrounding addiction, working with an experienced estate planning attorney is helpful.
If you do not yet have a plan in place, request a consultation with Harvest Law KC in Overland Park, Kansas.
This post is for informational purposes only and does not provide legal advice. You should consult an attorney for advice on any specific issue or problem. Nothing herein creates an attorney-client relationship between Harvest Law KC and the reader.
Reference: Market Watch (March 10, 2026) “We have $13.5 million and 3 kids, but one is an addict. How do we fairly divide our estate?”
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