It was the summer between her sophomore and junior year at the University of Wisconsin-Madison when Patti Sacher’s daughter Keisha had a breakdown. She had taken LSD at a Grateful Dead concert one weekend in 1989. When Mrs. Sacher called to check on her that Monday, Keisha wasn’t making sense. “She was hearing voices after the weekend, and her thoughts were disjointed,” Mrs. Sacher said of her daughter, who was then 19. “We couldn’t understand what she was talking about.” Keisha became more involved with drugs during the fall. By January, her parents were receiving alarming phone calls from their daughter’s friends. Keisha ended up being hospitalized that winter, but she wouldn’t come home. She was an adult, and her parents had no legal power over her. After a year, she acquiesced and returned to New York City.
The New York Times recently published “For Parents With Troubled Adult Children, Financial Hurdles Abound,”which talks about what can be done to help a loved one stricken with mental illness. It noted that there are many painful and emotional issues in situations of mental illness and addiction that affect children, but also there are financial plans that parents can use, such as a Special-Purpose Trust, that provides care for the suffering child and peace of mind for the parent.
A special-purpose trust is different from a special-needs trust, which is frequently implemented to pay for additional needs of those receiving government benefits where the government has strict restrictions on the recipient’s assets. A special-purpose trust can be used to provide children more of the life they might have enjoyed without mental illness or addiction, and it allows the parents the flexibility to make changes with the distributions.
Special-purpose trusts are more complicated to establish than regular trusts because of the powers they give to the trustees and the restrictions they place on distributions. However, the toughest part of creating a special-purpose trust is getting parents to accept them as necessary: parents must first acknowledge that their children will never fully recover.
Parents are advised to set out some very specific criteria for distributions into trust documents, for example, staying on medication or staying sober for a certain period of time. In addition, those with a family history of mental illness and addiction issues should get a power of attorney and health care proxy for children over 18 who are away at college. In the event that something happens to their child, the parents will have access to medical records and will be able to help.
Work through these issues with an experienced estate planning attorney to make sure that you are doing your best to help your child.
Reference: New York Times (August 28, 2015) “For Parents With Troubled Adult Children, Financial Hurdles Abound”