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Legal-Ease: Estate Planning for the Holidays

By December 16, 2016March 3rd, 2017No Comments

By Staci Yamashita-Iida, Esq.

(Originally published in the Dec. 16, 2016-Jan. 26, 2017 Holiday Issue of Pacific Citizen.)

It’s the most wonderful time of the year for many reasons: delicious feasts, twinkling lights, gifts galore and an almost-tangible spirit of joy that only the holiday season can bring. Most importantly, it is one of the few times during the year where everyone, despite their busy schedules, gathers together with their families. It is a time when we reminisce about the past, celebrate the present and contemplate the future. Accordingly, the holidays can be the ideal time to discuss with your loved ones one of the most important, yet one of the most overlooked, subjects: your estate plan.

Frankly, this isn’t the easiest topic to broach. Discussing death is morbid. Talking about personal finances can feel intrusive. And with these types of conversations, there is always the possibility of initiating a family fight. Despite all of this, however, these types of issues should be addressed now, so that the family does not have any confusion if and when the tough times come.

So, what exactly should you discuss? What questions should you ask? Below are some questions that can be used to spark a conversation about the basic elements in one’s estate plan. The questions are posed from the children’s perspective, but they can certainly be altered to frame the parent’s point of view.

Mom and Dad, Do You Have a Will or a Trust?

The fundamental document to every estate plan is a will or a trust. What’s the difference between the two? Well, they’re similar in that they both specify to whom you’d like your assets to go to after you’re gone.

However, the important distinction is that a will needs to be probated. Probate is the legal process where the court validates the will, inventories the deceased person’s property, settles debts and distributes the remaining property per the will. The whole process is expensive, time-consuming, exhausting … and completely preventable.

Avoiding probate can be accomplished through the creation and proper funding of a revocable living trust. So, if your parents own real property (a home, income properties, etc.), then make sure to ask whether they have a trust.

If they do, take a quick look to confirm that it’s up to date. Oftentimes, parents will create a trust when they’re in their 50s. At that time, their kids are in their late teens/early 20s, so parents appoint their siblings as successor trustee (the person who handles the affairs of the estate and ensures that the beneficiaries receive their inheritance).

Twenty years go by. Now, Mom’s brother, who was named as successor trustee, has passed away. Dad’s sister, who was named as the alternate, has developed dementia. Since the kids are older, Mom and Dad can appoint them as successor trustees instead. Other life circumstances (e.g., birth of grandchildren) may also warrant updates to the trust.

I recommend reviewing the trust with your parents to verify that their wishes are correctly memorialized. If not, then the trust can be amended to rectify any outdated provisions.

What About the Finances?

In the best-case scenario, your parents will be able to handle their own finances until their dying day. But things happen: strokes, Alzheimer’s and car accidents are just a few examples of ways your parents could become temporarily or permanently incapacitated. Even if no serious ailments or illnesses occur, your parents may start to slow down in their later years and request a bit of help managing their finances.

If you think this could be the case, you should ask your parents if they have a Durable Power of Attorney for Finances. This legal document designates and authorizes an individual — usually a responsible, trustworthy loved one — to assist with finances and asset management. This power can come into play upon your parents’ incapacity or right away (so that either you or your parents can handle the finances).

Unfortunately, people often do not realize how critical it is to have a Power of Attorney until it’s too late. Consider this real-life example: At 83, mother Linda was still very sharp until, all of a sudden, she suffered a severe stroke, leaving her in a coma. When the property tax bill and mortgage became due, daughter Danielle tried to access her mother’s bank accounts to pay the bills. However, because Danielle wasn’t authorized on that account to act on Linda’s behalf, Danielle had to pay the bills out of her own pocket.

If you haven’t done so already, speak to your parents and ask them at what point (if any) they would like you to step in to help with the finances and what they expect your responsibilities to be. Keep in mind that it’s imperative that they create a Durable Power of Attorney for Finances while they are still mentally competent. The sooner, the better!

What Are Your Healthcare Wishes?

One of the most difficult, but most important, conversations to have concerns one’s healthcare wishes. A Healthcare Power of Attorney, also known as an Advanced Healthcare Directive or Medical Directive, is a written document that accomplishes several tasks.

First, it designates a trusted family member or friend (an “agent”) to make decisions on the individual’s behalf if he or she is incapacitated and unable to do so his- or herself.

Second, it leaves a set of instructions for the agent regarding the individual’s goals, values and preferences for his or her healthcare. Parents normally appoint their children as agents, so if you are unaware of your parents’ wishes, consider asking the following:

  • What are your end-of-life decisions? Do you want your life to be prolonged? Do you want treatments that relieve you from pain and discomfort?
  • What type of treatments do you approve of? There may be certain medications that make your parents feel loopy, or they may be opposed to particular surgical procedures. If so, they should specify their wishes clearly.
  • What is your opinion on artificial nutrition and hydration? Artificial nutrition and hydration is a form of life-sustaining treatment that is given to an individual who cannot eat or drink on his or her own. The nutrients are generally delivered through a tube.
  • What are your thoughts on organ donation? Within a Healthcare Power of Attorney, your parents can identify what organs, tissues or body parts they’d like to donate, as well as the purpose for which the donation may be used (e.g., transplant, research, education, etc.).
  • Would you authorize an autopsy to be performed on your body?
  • What are your post-death wishes? Do your parents want to be cremated with their ashes spread in the ocean? Have they prepurchased a burial plot at a certain cemetery?

It is extremely important to have your parents address these questions within their Healthcare Power Attorney so that if the time ever comes, there is no confusion or hesitation over their wishes. When you’re in the hospital and the physician is asking you to make a tough call, the last thing you want to do is wonder what your mom or dad would’ve wanted.

So, though it may be uncomfortable or painful to do so, I encourage you to discuss these crucial issues over the holiday break to ensure that your parents’ wishes are honored and their estate plan is complete.


Staci Yamashita-Iida, Esq. is an Estate Planning attorney at Elder Law Services of California. She can be contacted at (310) 348-2995. The opinions expressed in this article are the author’s own and do not necessarily reflect the view of the Pacific Citizen or JACL. The information presented does not constitute legal advice and should not be treated as such.