It is every parent's worst fear. A child will agree to give away their inheritance for far less than it is worth for quick money.
Recently, MarketWatch published an advice column with the following question as its title: "My drug-addicted friend signed away his $800,000 inheritance to his brother — now he’s clean, can he get it back?"
The title is an almost complete description of what happened. A reader wrote in with a story about his friend who inherited $800,000 from his father's will. The friend was addicted to drugs and agreed to sign his rights to the inheritance away to his own brother for only $10,000.
Now, that the friend is sober, the reader wonders whether there is any way to get the inheritance back.
The column writer suggests that the friend hire an attorney and sue the brother for fraud based on the premise that he knowingly took advantage of someone who was mentally incapacitated. That might work in some cases.
But not so fast.
There are some states and courts that are not quick to undo agreements that drug addicts voluntarily enter into, especially if it cannot be proven they were high at the time of making the agreement.
This is the type of scenario about which many parents have nightmares, when it comes to their addicted children. Leaving the child an inheritance outright can quickly be lost.
Fortunately, there are ways to avoid the problem altogether without disinheriting the drug-addicted child. A trust can be used to protect the inheritance with a trustee who is granted the discretion to only distribute money when the child is able to handle it.
Reference: MarketWatch (Jan. 24, 2017) "My drug-addicted friend signed away his $800,000 inheritance to his brother — now he’s clean, can he get it back?"
Suggested Key Words: Estate Planning, Trusts
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