Ask Francine

By Francine Russo

Dear Francine,

My husband and I are in our 50s and have daughters 28 and 25. The older one is doing well, but the younger has been in drug rehab four times and now has a very modest job and apartment. In writing our wills (assets about $3 million), we are unsure how to leave a medical trust for her. Any money she receives will be ill spent. If her sister is the trustee, that will destroy what's left of their relationship. My accountant says his firm does this service. But how can I be sure the fees won't eat up the trust? Also, the accountant is in his 60s. If someone else ends up handling this, how will I know she is receiving money for the right reasons? Addicts can be very cunning. I need advice about this horrific problem. --Name withheld, Syracuse, N.Y.

Dear Syracuse,

You are living a parent's nightmare. Setting up a trust in your will is wise, and so is having a professional trustee. But choose carefully. With your accountant's firm you may get more personalized service, but with bank or corporate trustees you are assured they will be there decades from now, and they will have handled many tricky situations. Before you choose a firm, interview several. Ask how many accounts they handle, how they make decisions and what experience they have with addicts--because, sadly, your problem is all too common. As to cost, you can negotiate. Corporate trustees typically charge annual fees of 1% to 1.5% of assets managed, and accounting firms typically bill per hour, with annual costs running from $3,000 to $8,000 for an estate the size of yours, depending on activity.

It's critical to include clear guidelines about how the money is to be used. So be sure to have an experienced trusts and estates attorney draft the trust. Addiction specialists advise that money for housing, food, medical care and rehab be paid directly to the providers. You can create incentives, making your daughter's direct receipt of any money contingent on her passing regular drug tests. You might also provide more access to money after a specified period of being clean. Incentives, however, will tend to protect your money more than motivate your daughter, says David Crausman, a psychologist at the Waismann Institute in Beverly Hills, Calif., because addicts really recover only when they're ready. So none of this is foolproof. Still, as we know only too well, whatever our child's age or our imagined level of control, there's nothing foolproof about being a parent. --By Francine Russo

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