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

[Newblackdress]

It's a 45 year old DD who has been overspending all her life, running up huge debts and constantly appealing to family members to bail her out. She has a good job and earns well but is absolutely irresponsible and not always honest.

Her dad doesn't want to leave her out of his will or to leave more than half his estate to DD's brother in case of bad feeling between them. But doesn't want the money he leaves DD to be instantly disposed of leaving DD middle aged and with nothing but debts.
He'd like to leave a small lump sum to DD without strings and allocate the rest of her share to clear some or all of her debts. The deal would be that DD would present the paperwork to the executors with authorisation to pay them off, and the executors would do so until the money ran out.
If the debts amounted to less than the legacy (unlikely), the remaining money would go to charity. This is to avoid DD claiming that all her debts were paid off in order to get the remaining money (she has form for similar deceptions). And if she isn't willing to make the small effort it would take to present the paperwork in say 3 months, the whole amount would go to charity.
Has anyone tried anything like this?
And can anyone spot a major flaw?

Nothing feels right really. Don’t want to disinherit her. Just want to make a last ditch attempt to make the money actually benefit her.
Whatever happens she will receive around 30K to do what she likes with. Paying off the bank would be the remainder of her share.

OP - you said her dad didn’t want to give unequal shares, but if they’ve bailed her out in the past, could more be given to the son to balance that out? Say, she’s gets 25% and he gets 75% with a note to say this was to allow for money already given to dd during her parents’ lifetimes to cover previous debts.

If you set up a complex (and possibly expensive) arrangement that forces her to clear her debts, as others have said she’ll just run up more. So a small % to her in cash, she’ll either pay down her debts or spend it but she’ll be in the same position in 5 years time. The rest to the brother, with a separate letter telling him why this has been done and if he feels he wants to make it closer to 50/50 he should instead directly pay down some of her debts, not just give her a lump sum.

Another option - how much money are we talking about, enough to buy a flat ? If so, I’d go with that, a flat that belongs to the brother, but the sister can either live in it or have any profit from rental (setting it up with an amount held back for renovations /repairs). She gets either free roof over her head or an income but she’ll not own the property so it can’t be repossessed/sold to cover debts.

knew someone who as an alcoholic and his parents left him a large sum of money that was paid out to him on a regular basis. no point in giving a large amount as they knew what would happen

This is pretty good advice.

Ooh that could work provided DS was willing to take it on. Thanks.

I guess that would be a trust arrangement too. Thanks

Something like that would be great if it worked but in the past the parents provided rent free accommodation and she still demanded money all the time for other things and constantly complained about the flat. It would be a big ask for her brother to take that on.

seeing your update OP, then actually if you go for the 25%/75% split in favour of her brother, with a note saying this is to balance out her “getting inheritance in advance” when she was given money to cover her debts and living costs, then don’t have her brother give her anything else. He has to hold the line he gives her nothing so she’s not always asking. Really she needs to completely fail to get help. If giving her a rent free property just meant she felt entitled to have all her living costs covered by her dad, then don’t have her brother opening the door at all to him being the replacement of dad who bails her out.

Giving her a lump sum that’s just the 25%, accepting she might spend it, then also accept that help from parents when they were alive hasn’t fixed the problem so throwing more money at it won’t either. At some point she’ll have to chose to change, or be forced to. Helping keep the plates spinning is doing her no favours.

The more I read and respond to these helpful questions and suggestions the closer I get to thinking it’s hopeless unless there’s some big change in DD that hasn’t started yet. Perhaps losing her parents might trigger a change of attitude but otherwise it’s probably hopeless and whatever is done about an inheritance won’t help her.

We had a VLC SIL in our family too like this. High level demanding career, spent her money like water and never saved. I think spending gave her an endorphin high. Blew through an inheritance of 250k in a year (nothing much to show for it) then starts texting DH asking for his (much smaller) portion of the money when the taxman caught up with her because of her job.
Her DPs were well aware of her financial track record as they had bailed her out many times over the years. They did consider putting a trust in place in their wills but thought her 2 siblings (executors) would keep an eye on her finances and ensure she didn't blow it all. I think they ignored the link between stress and her need to spend. DH and BIL couldnt "control" or regulate her access to the cash because there was no trust and so she blew it anyway. She sadly died 18 months later but we were so relieved we weren't involved as executors in detangling and resolving the financial mess we heard she left behind.

I think that the trust fund with a monthly allowance is not a bad idea.

In fact I can think of many situations where this would be a beneficial approach to adopt.