You have worked hard to build financial security for your family. Your retirement accounts are funded, your life insurance is in place, and your will names your children as equal beneficiaries. On paper, everything looks orderly. But there is a problem that keeps you awake at night: one of your children is battling a serious addiction to alcohol or drugs. The thought of that child receiving a large inheritance—a lump sum that could fund destructive behavior or contribute to an overdose—is unbearable.

This is a situation faced by thousands of Maryland families. The opioid crisis has touched communities across the state, from the row houses of Baltimore City to the suburban neighborhoods of Montgomery County and the rural towns along the Eastern Shore. 

Standard estate planning documents—a basic will and simple beneficiary designations—are not designed for these circumstances. An outright inheritance can disappear in weeks, spent on substances or taken by creditors. The solution lies in creating a protective framework using specialized trusts that balance love, support, and accountability.

The Problem with Standard Inheritances

When you name a beneficiary on your retirement account or leave an inheritance through your will, that person typically receives the assets outright. They can spend the money however they choose, with no oversight. For someone struggling with addiction, this can be catastrophic.

Consider what happens when a person in active addiction receives a substantial sum. The cash may be used to purchase drugs or alcohol. It may attract predatory individuals. The funds could be seized by creditors from past legal troubles or unpaid medical bills. In the worst case, the inheritance provides the means for a fatal overdose.

Even if your loved one is currently in recovery, relapse rates for substance use disorders are significant. A large inheritance can trigger relapse by removing the financial necessity that often motivates continued sobriety. The sudden availability of funds can disrupt the routines and structures that support recovery.

Maryland courts, including the Orphans’ Courts that oversee probate proceedings in each county, have no mechanism to protect an adult beneficiary from their own decisions once assets are distributed. The Register of Wills in Anne Arundel County, Prince George’s County, or any other jurisdiction will transfer assets according to your documents—whether the result is beneficial or harmful.

Should I Disinherit a Family Member Who Has a Drug or Alcohol Addiction?

Disinheritance is rarely the best solution for protecting a family member with addiction. While cutting someone out of your will removes the risk of funding destructive behavior, it also eliminates any opportunity to provide for their housing, medical care, or eventual recovery through protected structures like trusts.

The instinct to disinherit comes from a good place—you do not want your money to cause harm. But addiction is a medical condition. People do recover. They enter treatment programs, complete rehabilitation at facilities like Ashley Addiction Treatment in Havre de Grace, and rebuild their lives. If your child achieves lasting sobriety five years after your death, disinheritance means they receive nothing.

A trust offers a middle path. You can create a protective structure that holds the inheritance until certain conditions are met, or that allows a trustee to make distributions for your loved one’s benefit without ever putting cash directly in their hands.

Types of Protective Trusts for Beneficiaries with Addiction

Maryland law recognizes several trust structures that can protect a beneficiary struggling with substance use.

Discretionary Trusts

A discretionary trust gives the trustee complete control over whether, when, and how much to distribute to the beneficiary. The beneficiary has no legal right to demand distributions. The trustee can refuse to make distributions if the beneficiary is in active addiction, or can direct payments to treatment providers, landlords, or other third parties rather than giving cash directly.

This structure creates a barrier between the beneficiary and the assets. Creditors generally cannot reach funds held in a properly drafted discretionary trust because the beneficiary has no enforceable right to the money. Your trust document can include guidance for the trustee about your intentions—expressing your hope that the trustee will support recovery while making clear they should not enable destructive behavior.

Spendthrift Trusts

A spendthrift provision prevents the beneficiary from assigning, pledging, or transferring their interest in the trust. It also prevents creditors from reaching the trust assets before distribution. Maryland recognizes and enforces spendthrift provisions under the Maryland Trust Act. Your loved one cannot borrow against their expected inheritance or promise future distributions to a dealer or creditor.

Incentive Trusts

An incentive trust ties distributions to specific behaviors or achievements. Common incentive provisions include:

• Completion of an accredited inpatient or outpatient treatment program
• Maintaining sobriety for a specified period, such as one year or five years
• Passing random drug tests administered by a designated testing facility
• Maintaining employment or pursuing education
• Regular participation in support groups or counseling

These provisions require careful drafting. What happens if your child relapses after three years of sobriety? Does one failed drug test disqualify them permanently? These questions need clear answers in the trust document.

Can I Require Drug Testing Before My Child Receives Their Inheritance?

Yes, you can require drug testing as a condition for trust distributions under Maryland law. Your trust document can specify that the beneficiary must submit to random testing, with distributions contingent on negative results. You must include clear procedures for testing frequency, facility selection, and consequences for positive results.

First, designate who administers the tests. Options include having the trustee arrange testing through a medical laboratory or allowing the trustee to select any certified facility. Quest Diagnostics and LabCorp both operate multiple collection sites throughout Maryland, from Rockville to Salisbury.

The trust should specify how frequently testing occurs. Random testing is generally more effective than scheduled testing. You should also address what happens if the beneficiary fails a test or refuses. A single positive result might pause distributions for six months, with distributions resuming after renewed commitment to recovery.

Choosing the Right Trustee

The trustee you select will make life-changing decisions for your loved one after you are gone. This choice may be the most important decision in your entire plan.

Family members as trustees present both advantages and challenges. A sibling may understand the beneficiary’s history and care deeply about their wellbeing. But family trustees can be manipulated or guilted into making distributions they shouldn’t. A sibling who must refuse their brother’s request for money may become the target of resentment.

Professional trustees—such as trust companies, banks, or attorneys—offer objectivity and experience. They will not be swayed by emotional appeals. Many families in the Baltimore-Washington corridor work with corporate trustees based in Bethesda, Towson, or Annapolis. The drawback is cost: trust companies typically charge annual fees based on a percentage of assets.

A hybrid approach uses co-trustees: one family member and one professional. The family member provides insight, while the professional ensures compliance and offers a buffer in difficult situations.

What Is a Spendthrift Trust and How Does It Protect a Beneficiary with Addiction?

A spendthrift trust is a legal arrangement that prevents the beneficiary from transferring their interest in trust assets and shields those assets from most creditor claims. Under the Maryland Trust Act, this protection remains in place as long as assets stay within the trust.

The protection works in two directions. First, it stops voluntary transfers—your child cannot sell or pledge their interest to anyone else. Second, spendthrift provisions block involuntary transfers through creditor claims. If your loved one owes money to credit card companies or hospitals, those creditors generally cannot attach the trust assets. The exception is that once money is actually distributed, it becomes personal property and loses this protection.

Combining spendthrift provisions with discretionary trustee powers creates comprehensive protection. Together, they ensure assets are preserved for your loved one’s genuine benefit.

Coordinating with Government Benefits

Many individuals with long-term addiction issues receive government benefits such as Medicaid or Supplemental Security Income (SSI). These programs have strict asset limits. A direct inheritance could disqualify your loved one from benefits they depend on for healthcare.

If your family member receives or might need means-tested benefits, consider a supplemental needs trust (also called a special needs trust). This trust holds assets without counting against benefit eligibility limits. The trustee can pay for things government benefits do not cover—private therapy, dental care, clothing—without jeopardizing coverage.

Maryland-Specific Planning Considerations

Estate planning for Maryland residents involves navigating state-specific laws that affect how trusts are created, administered, and taxed.

Maryland is one of a handful of states that imposes both an estate tax and an inheritance tax. The inheritance tax rate is generally 10% for recipients who are not close relatives, though children are exempt regardless of the amount they receive.

Trust administration in Maryland falls under the Maryland Trust Act, which provides rules for trustee duties, beneficiary rights, and trust modification. The Act recognizes the validity of spendthrift provisions and discretionary distribution standards, giving families flexibility to create protective structures.

If your estate plan includes a revocable living trust, the trust administration occurs privately, outside the probate process at the Register of Wills. The terms of your protective trust do not become part of the public record—offering privacy that some families value. For families with real property in multiple states—perhaps a vacation home at the beach in Ocean City—trust-based planning can also avoid ancillary probate proceedings in each state where property is located.

Practical Steps for Protecting Your Loved One

Creating an effective estate plan for a family member with addiction involves several concrete steps:

• Review your current beneficiary designations. Check your life insurance policies, retirement accounts, and any transfer-on-death registrations. If these name your loved one directly, assets will pass to them outright regardless of what your will or trust says.
• Consider the trust structure that fits your goals. A purely discretionary trust gives maximum protection but requires complete reliance on the trustee’s judgment. An incentive trust provides motivation and measurable benchmarks. Many families combine elements of both.
• Select your trustee carefully. Think about who has the judgment, objectivity, and availability to serve for potentially decades. Consider whether a professional trustee or co-trustee arrangement makes sense.
• Draft clear guidance for your trustee. Your trust document should explain your values, your hopes for recovery, and the types of expenses you want the trustee to consider.
• Update your plan as circumstances change. If your loved one achieves long-term recovery, you may modify the trust terms. If their situation deteriorates, additional protections might become necessary.

Frequently Asked Questions (FAQs)

Can my child contest a trust that restricts their inheritance?

Maryland courts generally uphold properly drafted trusts that include spendthrift and discretionary provisions. A challenge is most likely to succeed if there are procedural defects in how the trust was created or evidence that the creator lacked capacity.

What if my loved one is in recovery when I pass away?

A well-drafted trust anticipates this. You can include provisions that allow the trustee to liberalize distributions as the beneficiary demonstrates sustained recovery, or give the trustee discretion to distribute principal outright if circumstances warrant.

Should I tell my child about the trust restrictions?

This is a personal decision that depends on your family dynamics. Some parents have an honest conversation explaining that restrictions come from love and concern. Others prefer to keep details private. There is no legal requirement to disclose trust terms during your lifetime.

What happens to trust assets if my child passes away?

Your trust document should specify who receives remaining assets. You might name your other children, grandchildren, or charitable organizations. Without this provision, assets could pass according to your loved one’s own estate plan.

Protect Your Family’s Future with Baddour Law Firm

Planning for a family member with addiction requires balancing difficult emotions with practical legal strategies. You want to help, not enable. A thoughtfully structured trust can accomplish these goals—supporting your loved one’s recovery while preventing your assets from fueling destructive behavior.

Baddour Law Firm helps Maryland families create estate plans that address sensitive situations with care and precision. We understand the concerns that keep you up at night and the hope you hold for your loved one’s future.

Contact us today at 301-494-2108 to schedule a consultation. Let us help you create a plan that protects your loved one while honoring your legacy.