The Dilemma of Troubled Adult Child Beneficiaries

Children we love grow up. Many parents with concerns about a struggling adult child are apprehensive about discussing such a sensitive topic. But broaching this subject can lead to a number of benefits for the family and for the adult child.

Adult children who are struggling with addiction, irresponsibility with money, or messy marital issues all fall into the “troubled adult children” category, sometimes called irresponsible children, because these issues typically concern parents. Many parents are concerned about where their financial assets will end up if distributed to these troubled children. No one wants their legacy to be squandered on a harmful addiction, seized by a creditor, or absorbed by a contentious divorce.

So how can you evaluate whether you should take steps beyond just worrying about things? Ask yourself, on a scale of one to ten, what level of anxiety do you feel about distributions going directly to the child in question. This is an easy way to determine how much follow-up is needed. If your anxiety is high (anything over a six), then loop in a proficient (their sole specialty) estate planning attorney as soon as possible. This first step can be daunting, as it often touches on an emotionally loaded topic for the family, but asking yourself about the anxiety level in this numerical term first, rather than the specifics of the situation, helps you express to yourself your concern without having to deal with complicating your thoughts with other messy details. If the concern is great, then there are methods to address them. As a result, you can begin to put your mind at ease, by taking the step to manage the situation with everyone’s best interests in mind.

One solution that can mitigate the negative impacts of unstable adult children on a family’s wealth is the use of the lifetime trust. Lifetime trusts hold and manage inherited assets, while making distributions throughout a beneficiary’s life rather than a one-time distribution of assets.  This minimizes the risk of irresponsible or unwise spending. Because the inheritance is never distributed into a joint account, these types of trusts can also keep the assets out of the hands of unhappy ex-spouses after a divorce. Plus, lifetime trusts can contain tax planning that minimizes income and estate taxation.

Keeping money within a trust not only solves your client’s concerns by adding extra protection to the management and distribution of a child’s inheritance. And taking this important step goes a long way towards putting your mind at ease. Working with professionals can you achieve your family’s goals and fully protect everyone, resolving these sensitive situations smoothly and privately.


You should have a discussion with a qualified, and experienced (all they do is estate planning and elder care) attorney. Where to find one?

In no particular order and not necessarily a complete list – but a place to start:

National Network of Estate Planning Attorneys

National Academy of Elder Law Attorneys

American Academy of Estate Planning Attorneys

American College of Trust and Estate Counsel

National Association of Estate Planners and Councils


I wish to thank Samuel K. Swenson for the article above, originally written for advisers which I’ve edited for the public at large.

Photo by  Dana Tentis on StockSnap

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