National Special Needs Month - Special Needs Planning for a Substance Abusing Child
By Don Drake, Connelly Law Offices, Ltd.
"As we observe National Special Needs Month, it is important to delve into a very specific aspect of special needs planning, which is safeguarding beneficiaries with substance abuse disorders from using their inheritance in a way that could endanger their lives, specifically through overdoses," stated professional fiduciary and certified elder law Attorney RJ Connelly III. "In today's blog, we will take a closer look at this topic, given the concerning fact that despite efforts to combat addiction deaths through overdoses, we have not yet made significant progress. In fact, the trends are looking worse. People of all ages diagnosed with substance use disorders continue to increase, and so do overdose deaths. The pandemic and the resulting lockdowns only exacerbated the issue by isolating individuals and making access to treatment more difficult."
According to the Centers for Disease Control (CDC), nearly one million individuals have lost their lives to drug overdoses since 1999, and the numbers keep rising. Attorney Connelly points out that opioids, despite widespread efforts to change prescription habits of the medical community and educate communities where the problem is rampant, remain the primary drug responsible for these fatalities.
"Fentanyl has become a pervasive problem since it is being mixed with other drugs like cocaine, methamphetamine, and fake prescription pills that are designed to look like oxycontin and oxycodone," said Attorney Connelly. "It is also found in counterfeit benzodiazepine tablets like Xanax and Valium. This makes it challenging to identify and prevent overdoses, which is why it is more crucial than ever to safeguard the inheritance of beneficiaries with substance abuse disorders through special needs planning."
Branca's Story
An elderly Cape Verdean woman entered the therapist's office in Boston for her first counseling session. It was easy to see the distress in her eyes and a lifetime of struggle etched in the wrinkles on her face. Her name was Branca and the story she told was unique, yet typical of the plight of families living with an addict.
She had three children, two daughters and a son. One of her daughters, Helena, had died from an overdose of drugs. Her youngest daughter, Valeria, was a nurse at a hospital in the greater Boston area. Her son, Davi, seemed to be following in Helena’s footsteps.
Branca stated that Davi has been to programs in this country, and she even sent him out of the United States to a program in France, but nothing seemed to work. “Even with my problems,” she explained, “I still manage to buy property here in Massachusetts and in my homeland. I also have a lot of money saved. I’m old and I know when I die, if Davi gets his hands on money, he will get worse. Can you help?”
What can be done to help someone like Branca and hundreds of thousands of others in the same predicament? Well, a legal tool like a trust could be helpful for someone like Branca and give her some peace of mind, but it needs to be developed specifically to help the individual with the disorder.
A Special Needs Trust
In a recent presentation, Attorney Connelly provided detailed explanations about the use of trusts and, specifically, special needs trusts and the eligibility criteria for disability benefits for individuals with substance use disorders. "There are specific reasons why a special needs trust is necessary, and not everyone with a substance use disorder will qualify for disability benefits," he told those in attendance.
"Many people assume that drug addiction is a disability under federal law, but this is not the case," Attorney Connelly stated. "The Social Security Act was amended about twenty-seven years ago, eliminating eligibility for disability benefits based solely on drug addiction or alcoholism. Prior to that, individuals could obtain Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) benefits if their alcoholism or drug addiction was severe enough to prevent them from working."
Attorney Connelly explained that today, a person cannot receive disability benefits if drug addiction or alcoholism is a material factor in their disability. However, a person can still be found disabled if they have medical conditions that are not caused or worsened by the misuse of substances or if damage has occurred that would not be reversed even if the person stops using substances.
Why the Change Occurred
Despite addiction being classified as a disease, several factors led to the Social Security Act being amended. Attorney Connelly shed light on this issue by citing examples of how the system was exploited before the amendment. Prior to 1996, individuals with substance use disorders exploited the Social Security system with impunity. They would receive their SSI checks, spend them within a week on their substance of choice, and then spend the rest of the month in detox until the next check arrived. This was known as the "Merry-Go-Round of Abuse" in the treatment field, and it made a farce of those providing these services.
Retailers also got in on the action, with abusers, mostly those with alcoholism, often using a liquor store or bar as their "home address." Proprietors would keep them supplied with liquor and ensure they got their money when the checks arrived. The abuse was rampant, and the damage done to individuals with the disorder was unconscionable. This led to changes being made to the Social Security Act to prevent further misuse.
However, even with the changes made, some people have found ways to work around the rules. Today, those with addictions seek a mental health diagnosis that some providers say is the "root cause" of the substance abuse disorder and not the other way around. The reason for this is that if the substance abuse disorder is viewed as the material contributing factor in the mental health disorder, they will not qualify for disability benefits.
Now that we understand the history behind the abuse of SSI among substance abusers, let's take a quick look at the system as it stands today and why trusts are a valuable tool for parents who want to protect their children who are addicts as well as for those who do not suffer from this disorder.
Providing a Safety Net
Attorney Connelly emphasized the criticality of uninterrupted government benefits for those who receive Supplemental Security Income (SSI) and Medicaid. Losing this aid, if an inheritance occurs, can have life-altering consequences for them in the long run. For those who qualify for Social Security Disability Insurance (SSDI), there is no savings limit, but a trust can help manage the money when the child cannot do so safely. However, the focus of this discussion is on SSI and its importance.
Children with chronic substance abuse disorder may suffer from various medical conditions that require treatment and long-term government benefits. For instance, individuals who abuse intravenous drugs could end up with Hepatitis C, HIV/AIDS, various skin conditions, and other infections and organ problems.
Long-term use of drugs like cocaine and crack can result in severe damage to the heart, liver, and kidneys. Users are more likely to have infectious diseases. Chronic use also causes sleep deprivation and loss of appetite, resulting in malnutrition. Cocaine can cause aggressive and paranoid behavior as well as severe depression due to changes in brain chemicals.
When it comes to alcohol abuse, the entire body comes under assault. Not only can drinking cause temporary complications such as memory loss and coordination problems, but it can also lead to long-term side effects that are sometimes irreversible.
Heavy drinking can weaken the heart, impacting how oxygen and nutrients are delivered to other vital organs in your body. Excessive alcohol consumption can increase triglyceride levels – a type of fat in the blood. Elevated levels of triglycerides contribute to the risk of developing dangerous health conditions such as heart disease and diabetes.
Heavy drinkers are also at risk of harmful, potentially life-threatening liver problems, including alcoholic hepatitis, fibrosis, and cirrhosis. The pancreas is also at risk as long-term alcohol abuse causes the blood vessels around it to swell, leading to pancreatitis. This increases the risk of developing pancreatic cancer – a type of cancer that spreads rapidly and is usually deadly.
Women with addictions often turn to prostitution, putting them at risk of contracting sexually transmitted infections (STIs), including Hepatitis B (a major cause of liver cancer) and HIV (which could lead to AIDS). Other STIs like syphilis and gonorrhea can result in pelvic inflammatory disease (PID) and additional complications.
Attorney Connelly stresses the importance of ensuring uninterrupted government benefits. As SSI and Medicaid are needs-based programs with strict resource limits in place, it can be very difficult to regain them should an individual lose these benefits because of an inheritance; therefore, careful planning is a necessity, and a trust may be the best course of action. But it is important to remember that these trusts come with extremely strict guidelines and, for some family members acting as trustees, an emotional toll. Thus, it is advisable to explore this option further with the help of a legal expert.
A Family Member as Trustee
Trustees can be classified into two main categories: individual trustees and institutional trustees. An individual trustee is usually a family member or someone personally acquainted with the trustor. On the other hand, an institutional trustee can be a bank, agency, attorney, or financial advisor.
"When a family member struggles with addiction, it can put the entire family under immense pressure and lead to fractures within the unit," stated Attorney Connelly. "While many families tend to focus on the addict, it is important not to overlook the other family members who are often forgotten victims of addiction, as well as the relationships that exist between them. Individuals who have a substance use disorder can be very good at exploiting these strained relationships, causing internal conflicts that can strain even the strongest bonds. When money is added to this equation, the situation can quickly become explosive."
To better understand the impact of addiction on a family member who oversees a trust or is a rep payee for someone with a substance use disorder, let's look at a family from a town north of Boston. Despite their best efforts to help the child with the substance use disorder, he had multiple relapses. Eventually, he moved in with his sister and her family, and she became the rep payee for him. However, this decision resulted in horrific consequences that affected the entire family.
The Chaos of Managing Money
"All went well as long as Charles was told yes to his requests for money, but when the relapse occurred, the relationship went south in a hurry," stated Attorney Connelly. "Charles began stealing jewelry from his sister, a piggy bank belonging to his niece, and pawned tools that were stolen from the garage that belonged to his brother-in-law. These behaviors caused a major rift in the family unit when the brother-in-law told Charles to leave the house and move into a homeless shelter, something his sister disagreed with."
Soon, Charles began calling the house non-stop, at all hours of the day and night, asking for money from his SSI account. When his sister refused, he began to call her job multiple times daily, which nearly resulted in her being fired. When his brother-in-law stepped in and threatened to obtain a restraining order, Charles backed off and instead began loitering around his niece’s high school, accosting her and asking that she convince her mother to give him money.
“I love my brother,” his sister said, “but what he put me and my family through was sheer hell. He used every emotion imaginable, from guilt to anger in order to get access to this money, even telling his counselors that my husband was spending the money on himself. It was something I would never want to experience again.”
Over years and sometimes decades, the family of an addict may go through a range of emotions. While they understand how addiction can transform a person, the constant lies, manipulation, and abuse that an addict can impose upon their loved ones on a daily basis can result in immeasurable pain, along with massive financial and emotional damage.
Attorney Connelly pointed out that even the act of expressing love for an addicted child can sometimes backfire and unintentionally enable their destructive behavior. "Often, family members want to help their loved ones who are struggling with addiction by providing financial assistance, paying rent or utilities, and engaging in other behaviors that ultimately allow the addict to continue with their self-destructive lifestyle," he said. "In many cases, enabling behavior is rooted in feelings of guilt or responsibility on the part of the enabler."
The enabler may feel that their loved one's addiction is their fault and, thus, try to make things right by providing unwavering support. However, this can lead to untold heartache. Attorney Connelly's observation holds for many families struggling with addiction.
The Best for All Parties
Dealing with a loved one's addiction can be incredibly challenging, and it can be challenging to know the best course of action. The burden of managing uncontrollable behavior and accusations can take a severe toll on family members, leading them to engage in manipulative, lying, and stealing behaviors themselves. As a result, even the most loving and functional families can be destroyed by this cycle.
According to Attorney Connelly, seeking guidance from an experienced elder law attorney or professional fiduciary can be extremely helpful in developing a comprehensive plan to protect an heir struggling with substance abuse. Allowing an outsider to manage and administer the inheritance can help ensure the well-being of everyone involved. It's important to remember that substance abuse disorder can drastically change the dynamics of a family, and therefore, when a family member enters treatment, it takes time for the entire family to heal. In such cases, having an institutional trustee can prove invaluable as it removes emotions from the family dynamic during an incredibly challenging time.
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