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What are duties of a trustee of a substance abuse trust?

On Behalf of | Oct 3, 2021 | Fiduciary Representation |

A trustee is a fiduciary, meaning the trustee has a general duty to manage and protect the trust assets of the beneficiaries. Depending on the trust you create, your trustee may have different duties from other trustees. If you have a family member who struggles with drugs or alcohol, you may want to create a substance abuse trust to help your relative.

Certain duties go along with managing a substance abuse trust. You know that your trustee should not simply give money to your relative. Your family member might waste it on drugs or alcohol, plus the money may make your relative ineligible for government benefits. Kiplinger explains the different duties that your trustee may need to carry out to help your relative rehabilitate and make a good life.

Payments for rehabilitation

A substance abuse trust will generally pay for specific expenses for the beneficiary. Your trustee will likely have to cover rehab and other medical expenses associated with helping your relative get sober and healthy. Other costs may involve paying for job training and other professional services designed to make your family member a productive member of society.

Coordination with professionals

Putting someone through rehabilitation involves the work of professionals such as doctors and counselors. Whoever you pick as a trustee will need to coordinate with a treatment team in order to carry out the terms of the trust. If your trustee choice is not experienced in these matters, then your trustee should at least seek assistance from someone who understands rehabilitation.

Incentive clauses

Some substance abuse trusts contain incentive clauses. These give the beneficiary money dependent on reaching certain goals like staying off drugs for a period of time or completing education or getting a job. An incentive clause can be a challenge to enforce, however. A trustee must be able to verify that the beneficiary has achieved the goals set by the trust and be on the lookout for falsified results.

Whoever you ultimately choose to be your trustee should have the best interests of your family member at heart as well as the competence to carry out the duties of your trust. You may consider family members or, if you feel it necessary, a professional like a financial advisor for the job.