Leaving an inheritance to a spending addict; will this work?

I will say that I think in my sister’s case a trust with a set amount paid monthly would have been best and it would have worked. it would have limited the damage and would have given time before the crash and burn.

At the end I know my mum was hoping/expecting I’d step in to bail her out as my mum always did. I told her I wouldn’t and couldn’t if she was executor.

My mum knew it it would be a shitshow but I think she was tired of it all. On that front I don’t blame or think bad of her because of it.

Bear in mind I was up against a triple nine intellect that had no common sense.

It did for a couple of years and he hated both it and me for instigating it. When the head of chambers in charge of the trust went away for a couple of weeks R&R he managed to play two trust fund solicitors, who were trustees, against each other to access the main fund and blazed through £300k in three days till the head of chambers came back from holiday and stepped in to prevent him from also remortgaging the trust house he had to live in. At that point I was so glad I had had the common sense to refuse to act as a trustee or handle his affairs.

the £300k binge on drugs and booze finished what brain cells he had left and the head of chambers had him assessed and declared as lacking mental capacity. he died soon after and I left the legal firm to deal with the mess of debts he ran up.

The trust would have worked if his intellect had not been in the very top o.1% of the population. His years of using illegal drugs and booze racked it down to MENSA level merely fiendish and he used that to manipulate and convince the other trustees he could be trusted to manage his own affairs…….I tried.

It is worth speaking to a legal500 solicitors if you have complications such as a child in capable of using money wisely and what legal safeguards could be put in place so they have benefit of trustees managing funds but not direct access to money to run amok with.

it sounds like an addiction has she had counselling or spoken to her GP

I’m coming at this with some experience… My sister is the train wreck in my case. (She was a functioning alcoholic until my mum got sick then proceeded into the unfunctioning variety)

Here’s what happened. My mum left a 50% split of her assets between my sister and me. Sadly she appointed my sister as her executor 🤷‍♀️ She wanted my sister to feel included. (I promise I’ll keep this brief)

Anyway after my sister proceeds to take everything not nailed down and she finally manages to sell the house. Let’s just say for 300K. That was in Dec. Now we’re in June and and My sister has not released my portion of the funds (130K was what she said she’d send 🤔) and has had her house up on a public auction site (this happens when the bank forecloses for non-payment).

She hasn’t worked in 5 years. I’m in the US, so there isn’t anything like UC or any long term benefits that are easy to get. So I’m pretty sure she’s spent my portion which is why she ignored my text in Feb and May.

She’s likely used her portion to enable her to drink and she’s now living off of my portion. She’s unemployable in her profession and area already getting fired from the big companies headquartered there.

If she’s spent my portion (I mean hey maybe she’ll surprise me 🤪) I am more than happy to involve the probate court and police. And she’s a 55 yo woman who has never taken care of herself.

All of the above I told my mum would happen in a blunt conversation when we were discussing her final wishes.

Back to your situation
DD may suddenly find an epiphany and get control of her spending. That would be great. But I’d just approach the will as she’s just not going to change and either accept it or give the money to someone else.

Has she never been declared bankrupt? This is really what needs to happen for the cycle to end.

Can DH talk to her Mum about stopping helping her so that she does go bankrupt.

There is no point paying off her debts or even a monthly allowance that will just service debts.

Everyone, including credit companies of any type need to stop lending her money.

Has she gone to CAP or similar?

Have you ever asked her why she's like this? Has she had therapy?

I don't really think it's ok to try to control the way adults live, it's not going to be an easy message to receive if you leave half to her brother without strings and half to her with rules from beyond the grave.

Generally speaking you can't put conditions on a bequest (although worth asking a solicitor if there is a way round this). A discretionary trust might work but, unless it's a very large sum, the hassle and expense- and additional tax- probably make that a bit pointless.

She is an adult woman, you can't control her spending now and you certainly can't do it from beyond the grave. So either just leave her the money or leave it to someone else.

She's a grown up middle aged woman.
I think you need to accept that she is responsible for herself, her finances & her own decisions. You can jump though all the hoops you like, but this won't change.

I think you are being realistic in seeing that she won't change, but trying to control her finances from beyond the grave is foolish & IMO pointless.

Why not just accept she is who she is and leave her to it?

The only way you can stop her blowing the money is by not giving it to her.

What you can do is limit the rate at which she can blow it, maybe in the hope that some day she will learn responsibility before it all runs out (at the age of 45 this is unlikely).

Solicitors are the best people to ask for the technical details.

I know someone who had a trust built with a monthly payment as suggested above. When the person in question died, they trust was split and the two kids received it lump sum. Any costs would be better than setting the money in for and having it run out.

It would be a terrible waste. She would just run up new debts.
Basically the shit needs to hit the fan, sooner rather than later. Don't bail her out at all. See what happens. She needs therapy.

If you just do a trust that releases a certain amount per month. That way she can't spend it all at once.

But you can't try and tell her she must spend it on debts. She's always going to be in debt regardless because that's how she's been all her life. She won't become financially responsible just because you paid her debts. Either now or in death.

This a horrible thing to do to an adult unless they have incapacity and will be a nasty shock to her. Perhaps you should discuss your plans with her and see if you can work something out together if you really can’t leave her a lump sum.

What on earth is the point of paying off her debts?

She will just go out and get more debt.

You say she has been overspending all her life. You need to stop bailing her out now.

I'd think this was possible, but difficult to implement and actually has a fundamental flaw - if she sorts herself out and has no debt, she stands to inherit nothing, while her brother gets half the estate.
If you really want to restrict, I'd look in to a trust or setting up a pension (in trust) for her.

Edited to fix the ever unhelpful autocorrect monster!

As others have mentioned it sounds like you’re after a trust.

Now I’m going to be very blunt here. Before spending money and effort to set this up, think to yourself is it worth it.

At the end of the day let’s imagine you set up a trust for £50,000 with stipulations that it is used to pay debts. DD dutifully pays off the debts. Now what… she likely just runs up new debt. she’s no better off and you’ve given her the means to go out and spend.

I think you/DH need to figure out if you want to will her the money at all. As you said DH doesn’t want to give her less than her sibling. My advice is to just give it to her and not think about what she does with it. Sad to say you/DH is not going to be around to care.