Judd Matsunaga
Happy New Year!!! One positive part about the new year is making your New Year’s resolution. If you can’t think of one, I’ve got one for you — why not make creating or updating your will (or trust) your New Year’s resolution? Why? Because making a will or trust requires: (1) testamentary capacity; and (2) you have to still be alive. Plus, “Tomorrow is not promised” to any one of us.
Testamentary capacity, a subset of legal capacity, is a specific and lower standard required only for the execution of a valid last will and testament. This can mean that even if the doctor wrote a “letter of incapacity” stating that you shouldn’t enter binding legal contracts, you can still make a will. So, before you “lose your mind,” make sure your will (or trust) divides your estate and not your family.
Few issues cause as much disagreement between family members as inheritances.
Hundreds of years ago, dividing your estate was not a problem. If you like the old Samurai movies, you’re probably familiar with an outdated Japanese tradition where the eldest son inherits titles and estates to keep wealth and power within one linage. Historically, this practice maintained family status, kept power consolidated and prevented land fragmentation. However, modern day Japan favors equal distribution among all heirs, similar to current laws in places like England and the U.S.
American inheritance rules are deeply rooted in English traditions, particularly the Statute of Distributions (1670), which established a system for dividing property among family members when there was no will (intestacy).
The courts favor fairness and equality, applying the 14th Amendment’s Equal Protection Clause, striking down discriminatory practices based on gender. Most states follow a similar hierarchy, ensuring close family gets priority. The core idea is to distribute property to the closest surviving relatives. Upon death of both parents, typically to children equally (adopted included, stepchildren usually excluded). These laws prevent assets from going to the state (escheat) if someone dies without a will.
But, instead of dividing your family, what if there was a way to actually help bring them closer? I recently heard about a Nisei couple who left provisions in their trust that encourages their family to stay close for many years to come. The estate was divided among the four children equally, with a fifth share to be used to pay for annual family vacations. I wish I thought of it. It’s brilliant!
The overwhelming majority of Nikkei parents will say, “I want to be fair, I love all my children equally.” The simplest definition of “fair” is equal. Therefore, if your goal is to reduce conflicts between your children, then you should probably divide your estate “equally.”
Sometimes, however, “fair” does not necessarily mean “equal.” “Say what?” you might ask. You might have given one child gifts during your life. For example, you might have an estranged child, or you might have provided the down payment for a child to buy their home. To be fair, you may want to reduce that child’s share by the amount of that gift. Or, you might want to give a larger share to a caretaker child who has provided support in your latter years.
So, depending on your circumstances, you don’t have to divide the estate “equally” to be fair. Start by identifying your estate and estimating its value. Then, consider whether some beneficiaries should inherit more than others.
You have the right to leave your estate however you see fit. If it’s unequal, you need to put it in writing through a trust (or will). So, the question is, ‘How should I leave an unequal inheritance to my children without damaging and dividing them?’ Once you decide on a plan to divide your estate, that’s just part of the equation. The second part of the equation is sharing it with your children while you’re still alive and still of sound mind — that is what can make an unequal distribution work.
There are times where the worst thing you can do is “blindside” a child after death. If you are leaving unequal shares, you should have a family meeting where you can explain your reasoning why. If they aren’t inheriting as much as they expect, it’s only fair to let them know the truth before you die.
Family meetings will lead to fewer fights after the parents are gone because the children understand what the parents are trying to accomplish. Children can “get on board” even if they don’t completely agree with it.
If choosing one child to be the successor trustee could lead to problems, you could name your attorney or a trust company as your trustee. If you’re using an outside professional trustee, let the children meet with him or her and develop a relationship.
Finally, during the family meeting, talk to them about your tangible personal property, e.g., all the stuff lying around your home. Put your instructions in writing. Tell your kids where you keep your important papers, accounts and passcodes. Tell your kids where to find your durable power of attorney in case of an emergency or accident. Tell your kids where to find your estate planning attorney, financial planner, CPA and any other professionals that help you manage your estate. Lastly, share how important it is for them to set up their own revocable living trust.
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. 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.
