Estate Planning for a Child With an Addiction (Canada)

Last updated May 10, 2026 · 3 min read
Quick answer
Leaving a lump sum directly to a child struggling with addiction can do real harm, so most parents use a discretionary trust instead. The trustee controls when and how money is released — paying expenses directly, releasing funds in stages, or withholding during crisis — rather than handing over a cheque. Choosing the right trustee and leaving a letter of wishes to guide their discretion are as important as the trust itself.

Few estate-planning problems are as painful as this one: you want to help a child who is struggling with addiction, and you are afraid that helping the wrong way will make things worse. A lump-sum inheritance handed to someone in active addiction can vanish quickly, or worse, fuel the very crisis you spent a lifetime worrying about. The tool that lets you provide without putting a destabilizing windfall in their hands is the discretionary trust, and how you set it up matters as much as the decision to use one.

This guide covers why a direct gift is risky, how a discretionary trust works, choosing a trustee, and the role of a letter of wishes. It is general information for the common-law provinces, not legal advice; this is a situation that warrants a lawyer.

Why a direct gift is risky

A will can leave a child money outright, but for a child in active addiction that can be the worst possible structure. A large unrestricted sum is available all at once, with no control over how it is used and no ability to adjust as circumstances change. Parents in this situation almost always want something between "nothing" and "a cheque" — and that middle ground is a trust.

The discretionary trust

In a discretionary trust, the trustee — not the child — decides if, when, and how much to distribute, within the terms you set.[1] That control is the whole point. The trustee can:

  • Pay expenses directly to providers — rent, utilities, medical and treatment costs — rather than handing over cash.
  • Release funds in stages, tied to time or to milestones you describe.
  • Pause distributions during a crisis or relapse, then resume.
  • Adjust as the child's situation improves or deteriorates over the years.

The result is an inheritance that supports the child steadily instead of arriving as a single windfall. Trusts have their own tax treatment, so the structure should be designed with that in mind.[2] Related structures — spendthrift and testamentary trusts — are covered in our trust guides.

Choosing the trustee

This is the decision families most often underweight. The trustee must be trustworthy, level-headed, and — crucially — able to say no, sometimes to someone they love, over many years. That is genuinely hard for a sibling or parent caught in the family dynamic. Many families therefore use a professional or corporate trustee, or pair a family member who knows the child with a professional who can hold the line and handle the administration. Continuity matters too: the trustee may need to serve for decades.

The letter of wishes

A trust gives the trustee discretion; a letter of wishes tells them how you would want it used. Without locking the trust into rigid rules, you can explain your hopes, describe what milestones might look like, say how you would handle relapse, and indicate when to be generous and when to be cautious. The trustee is not bound by it, but it gives them your judgment on decisions you will not be there to make — invaluable in a situation this nuanced.

When disability benefits are also in play

Addiction and disability sometimes overlap, and if your child receives provincial disability benefits, the trust must also be designed to protect that eligibility — which can point toward a Henson trust. The interaction between trust distributions and income-tested benefits is technical and province-specific, so this combination in particular calls for a lawyer experienced in both addiction and disability planning.

What we focus on at It's Simple Will

The Will Creator is built for straightforward estates; a discretionary trust for a child with an addiction is specialized drafting that belongs with an estates lawyer, and our guides aim to help you arrive at that conversation knowing the structure you need and the questions to ask. A clear will and a thoughtful letter of wishes are the foundation that planning sits on.

Citations & sources

  1. [1]Succession Law Reform Act, RSO 1990, c S.26 — testamentary gifts and trusts — Government of Ontario
  2. [2]Income Tax Act, RSC 1985, c 1 (5th Supp) — taxation of trusts — Justice Laws Website, Government of Canada
  3. [3]Administering estates (Ontario) — Government of Ontario

Frequently asked questions

Should I leave an inheritance directly to a child with an addiction?

Usually not as a lump sum. A large, unrestricted inheritance can fuel the very problem you worry about and may be lost quickly. Most parents in this situation use a discretionary trust so a trustee, not the child, controls the timing and purpose of distributions, protecting both the money and the child.

What is a discretionary trust and how does it help?

It is a trust where the trustee decides if, when, and how much to pay a beneficiary, within terms you set. For a child with an addiction, the trustee can pay rent and medical costs directly, release funds in stages tied to milestones, or pause distributions during a crisis — keeping the inheritance from becoming a single destabilizing windfall.

Can the trust pay for treatment and living costs?

Yes. You can direct or empower the trustee to pay for housing, food, medical and treatment costs, and other needs directly to providers rather than in cash to the beneficiary. Paying expenses directly is a common feature, since it supports the child without putting large sums in their hands.

Who should be the trustee?

Someone trustworthy, level-headed, and able to say no — which is hard for a sibling or close relative caught up in the family dynamic. Many families use a professional or corporate trustee, or pair a family member with a professional, precisely because the role requires firmness and longevity over many years.

How does a letter of wishes fit in?

It guides the trustee's discretion without locking the trust into rigid rules. You can explain your hopes, what "milestones" might mean, how to handle relapse, and when to be generous or cautious. The trustee is not bound by it, but it gives them your perspective on decisions you won't be there to make.

What if my child also receives disability benefits?

Then the trust must also be designed around benefit eligibility, which can point toward a Henson trust. Whether the beneficiary's interest is counted as an asset for eligibility purposes depends on the wording and structure of the particular benefits program, and addiction and disability planning can overlap, so this is a situation for a lawyer experienced in both.

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