Judd Matsunaga
I have two goals in life. My first goal is to live to be 100 years old. My second goal is to bowl a perfect 300 game. My bowling buddies at the Nikkei bowling leagues say I’ve got a better chance to make it to 100. Fortunately for me (and you, too), the CDC National Center for Health Statistics says the 100-plus population is living longer (source: www.cdc.gov/nchs/data/databriefs/db233.pdf).
“How much longer?” you might ask. Well, the L.A. Dodgers recently recognized 110-year-old Yoshiko Miwa on Japanese Heritage night. She is believed to be the second-oldest person living in California and the oldest Japanese American in the country.
The good news is that studies have shown that the total number of Americans living to age 100 or older is going up.
However, the bad news is that Alzheimer’s increases with age. It is the only Top 10 cause of death that cannot be prevented, cured or even slowed. Sounds frightening? You bet.
No one likes to think about the possibility of becoming mentally incapacitated. However, having a plan in place ensures that your wishes will be honored if and when cognitive impairment arises. By procrastinating, you are doing yourself and your loved ones a great disservice.
With Alzheimer’s and dementia affecting millions of people each year, it is increasingly important that individuals have an estate plan before symptoms appear.
Legal capacity is the ability to understand and appreciate the consequences of one’s actions and make rational decisions. Creating an estate plan requires someone to have the mental capacity to understand and make judgments regarding the nature and consequences of decisions made. As long as the person has legal capacity, he or she should take part in legal planning.
Here’s the key — a medical diagnosis of Alzheimer’s or other dementia does not mean “incapacity.” Specific laws can vary by state, but a guiding principle is a person’s current mental state — usually being “of sound mind” — and not a specific diagnosis. A lawyer can help determine what level of legal capacity is required for a particular document, as it can vary from one type of document to another.
In most cases, if a person with dementia is able to understand the meaning and importance of a given legal document, he or she likely has the legal capacity to execute (to carry out by signing) it. In California, there is a rebuttable presumption that all persons have the capacity necessary to make decisions and be accountable for them. However, this presumption can be challenged in specific situations.
Example 1 — Mom has moderate Alzheimer’s disease: Although she can’t remember what she had for breakfast, she understands she needs to execute a trust to avoid probate. She has one daughter who gets 100 percent of the estate. Conclusion: Mom can execute estate planning documents because nobody is going to challenge it.
Example 2 — Mom has moderate Alzheimer’s disease: Although she can’t remember what she had for breakfast, she understands she needs to execute a trust to avoid probate. She has three children and wants to disinherit two, leaving 100 percent of the estate to the care-giving child. Conclusion: Mom can execute estate planning documents but should get a medical validation of mental capacity.
Remember, there’s no law that states that a parent has to divide his or her estate to all the children “equally.” However, if that’s not the plan, make sure you execute your will or trust before any medical records indicate cognitive issues.
Therefore, people diagnosed with Alzheimer’s or dementia who are not dividing their estate “equally” should have their mental capacity verified by a qualified health- care provider before proceeding with an estate plan. If you have concerns about the person’s ability to understand, a doctor will be able to help determine the level of his or her mental capacity.
If the doctor is not able to help, and you still want to make an unequal distribution of your estate, there are ways to reduce the likelihood of future litigation between your children: Make a small gift to the child or children you wish to disinherit. Then, put a “no contest” clause in your will or trust. This way, it discourages a challenge. In other words, they would rather get something than nothing.
While you’re at it, make sure your aging parent also creates valid Power-of-Attorneys (POAs). You need a Durable POA in case of incapacity. Without one, the court could appoint a stranger to be your public guardian. If you have an adult child helping you pay the bills now, the POA could be effective “immediately.” If you’re still quite capable, most POAs are “springing,” meaning the agent’s power springs into effect upon incapacity determined by a doctor.
In conclusion, just because your aging parent rebuffs your concerns, ignores safety issues or refuses to accept help, that doesn’t mean he or she has lost mental capacity. Taking the time to create an estate plan ensures that, in the event of incapacity, a person’s affairs are managed according to their wishes, and care needs are adequately addressed.
Judd Matsunaga is the founding attorney of Elder Law Services of California, a law firm that specializes in Medi-Cal Planning, Estate Planning and Probate. He can be contacted at (310) 348-2995 or judd@elderlawcalifornia.com. The opinions expressed in this article are the author’s own and do not necessarily reflect the view of the Pacific Citizen or constitute legal or tax advice and should not be treated as such.
