Jacqueline Z. Fox, Esq., LL.M.
Shortly after Denver narrowly passed a ballot measure decriminalizing psilocybin (also known as “magic mushrooms”), Oakland, California followed suit less than a month later after its City Council unanimously passed a resolution to decriminalize the adult use of hallucinogens derived from plants or fungi, including entheogenic mushrooms and the psychoactive alkaloids found in the peyote cactus. Now other local and state governments are looking to follow the leads of these cities; particularly, activists in Oregon and California that are pushing for statewide decriminalization of psilocybin, and a lawmaker in Iowa who introduced a similar measure back in February of this year. Further, on June 7, Alexandria Ocasio-Cortez (“AOC”), U.S. Representative for New York’s 14th congressional district, introduced legislation that would allow federal funding for scientific research of the medical benefits of psychedelic drugs like psilocybin and MDMA (also known as “ecstasy”).
While some advocates of the decriminalization of psilocybin claim that it will open the door for research into its medical benefits (such as was intended by the legislation recently introduced by AOC), others argue against its decriminalization by disputing that it will promote higher rates of drug abuse (that is, like heroin, LSD, and ecstasy, psilocybin is federally a Schedule 1 drug under the Controlled Substances Act, meaning the federal law views psilocybin as a drug that has no accepted medical use with a high potential for abuse).
Regardless of where you stand on this issue, it is always prudent to take a look at your current estate plan to make sure that it remains consistent with your original intent and design for the benefit of your family. As society changes so do the laws that govern it. Thus, if you are concerned with the provisions of your estate plan as it relates to distributions to beneficiaries with potential substance abuse issues, or beneficiaries who are spendthrifts or otherwise lack motivation to obtain an education or pursue a career, then it may be a good time to have “goal-driven” provisions added to your trust instrument.
That is, while trusts are great estate planning vehicles that can assist in protecting inheritances from creditors, divorce, bankruptcy and lawsuits, they can also do so much more. More specifically, consideration may be given by a trustee as to adding provisions to a trust agreement that motivate future beneficiaries in to bettering themselves. For example, a trust can build in caps on how much can be withdrawn from the trust on a periodic basis. This can extend the life of the trust so that a beneficiary does not exhaust financial resources during his or her earlier years while being more prone to making bad decisions or falling for third-party financial schemes. A more seasoned trustee can also provide counsel to the beneficiary on how to avoid bad investments. The trustee could even require a sound business plan from the beneficiary before making a distribution.
In addition, the trust could also encourage that distributions may be used for the beneficiary’s personal travel to visit with other family members or to pursue further education. On the flip side, the trustee could be authorized to withhold distributions if the beneficiary is living irresponsibly.
Distributions could also be tied to successful efforts made by the beneficiary, such as making good grades, or matching a salary or profits or savings deposits. The possibilities are limited only by your imagination. Caution should be taken, however, to make clear in the trust instrument that any such incentive clauses do not rise to the level of being viewed as providing the beneficiary with any entitlement to trust assets. Therefore, sometimes using a “Letter of Wishes” is a better alternative to build in such guidelines.
Lastly, consideration should be given into naming a protector to serve in connection with your trust (if you do not have one already) as a method of having a second level of protection over the actions of the trustees. That is, a protector can serve as the “watch dog” over the trust assets by being provided with the power to “veto” certain actions of the trustee before they are effectuated. For example, the protector may be given a veto power over: making distributions to the trust, removing a trustee, delegating trustee powers, revising trust provisions and changing or adding beneficiaries, changing the applicable law, etc. To many the addition of a protector (or fine tuning an existing protector’s powers) provides peace of mind that there is a system of “checks-and-balances” in place that better protects the assets of the trust as well as the beneficiaries themselves.
Please contact our office if you would like to discuss implementing these strategies into your estate plan.