This article, “Working with Beneficiaries with Mental Health Challenges, An Action Plan for Estate Planners and Trustees,” written by Amanda Koplin, Martin M. Shenkman, and Richard Trumpler, is shared here with their permission. The original article was first published here.
Introduction
As an estate planner or trustee, encountering clients with mental health challenges is as inevitable as encountering clients navigating the effects of aging. While many advisors have protocols and referral sources for assisting clients with physical and cognitive aging issues, few are equipped with policies, procedures, and referral sources geared toward protecting and assisting beneficiaries addressing mental health and addiction concerns. Often, advisors struggle to know where to begin. Some advisors are simply uncomfortable with addressing these issues.
Estate planners, in all disciplines, and trustees need an actionable plan to effectively support and protect the best interest of beneficiaries facing mental health challenges. This is true whether these issues are known from the outset, or whether they emerge later in their working relationship. Having a checklist of the necessary steps to take within the context of each role will empower advisors to integrate comprehensive strategies to address mental health issues alongside physical health and aging issues in their practices. This proactive approach ensures holistic support for those that they are advising (e.g., if advising a trustee as to how to address beneficiaries with mental health challenges) across all facets of their well-being.
These Issues are Common and Affect All Advisors
Many advisors assume that mental health scenarios are uncommon. The opposite is true. The misconception may be due, in part, to the societal discomfort with addressing the realities of mental health. For a lot of people these conversations remain awkward, and that is unfortunate.
More than twenty percent of people struggle with some degree of mental illness. In any given year, about one in five adults in the United States has a diagnosable mental health disorder[1]. One in twenty adults has a serious mental illness[2] and one in six adults has a substance use disorder[3]. Half of all chronic mental health disorders begin by age 14 and three quarters of all mental illnesses begin before age 24[4].
Every estate planning professional has a role to play in serving their clients and families or beneficiaries with these challenges. Attorneys should address mental health provisions in drafting wills, trusts and other estate planning documents, perhaps tailoring the documents when there is a known issue. CPAs can serve as monitors or evaluate financial data to identify spending issues indicative of an issue. Financial advisors can create budgets to incorporate medical needs, and much more. Trustees have the administrative power and oversight to fund or limit distributions which could help or hurt a beneficiary. Given the common occurrence of these issues, all advisors should be attuned to them to better help clients.
What Would You Do? Where Do You Start?
Trustees could end up compromising situations where beneficiaries become symptomatic with their mental health challenges. If unprepared, trustees could be forced into action but unsure what they should and shouldn’t do. More times than not, they are brought into the situation by the beneficiary because of the nature of their relationship and the trust built between the two parties. Outlined below are three common scenarios trustees encounter. Ask yourself: “If this were a beneficiary of a trust I was fiduciary for, would I be able to handle this reasonably to protect the beneficiary?” Or, as a lawyer, “If the trustee (or beneficiary) was my client, would I be prepared to handle this situation and guide the trustee (or beneficiary) appropriately?”
Read the rest of the article here.
Become a Member for Your Expertly Curated Advice
Joining the Family Wealth Library means access to the information the legacy builders need to navigate family dynamics and protect our wealth. We can keep what is ours by managing familial challenges and building trust and transparency.