With a fiat currency, it's not actually destroying anything. I'd rather no one feel it as part of their bottom line, or there will be pressure. Certainly, moving it far from law enforcement would be an improvement, but I think destruction is better.
Putting that person further away from the police probably improves things, as I said, but better that we just build such hospitals and fund such social programs as we actually need, and not rely on people doing bad things (either the people whose stuff is being confiscated, or the police confiscating property of innocents) to make it happen.
Note again that at this scale cash isn't really a resource - it's a claim on resources. Destroying it doesn't destroy those resources, it releases the claim which winds up sort of distributed over other dollars.