Posts By: Gene Osofsky

Q.  I recently had to lay my wife to rest after almost 50 years together.  Our children keep saying that I should review our estate plan with an attorney to see if anything needs to be done and that all is in order. Do you have any suggestions as to things I should look for, or be aware of?
A.  Yes, and sorry about the passing of your wife. It is always difficult to lose a loved one, and especially so when you’ve been together so many years. Here is a short, but not necessarily a complete, list of things that you may wish to consider when doing so:
1) See If Your Existing Plan Takes Account of Your Current Family Circumstances:
Your estate plan should always be reviewed periodically, and especially so when there may have been changes in your family, such as births, deaths, marriages, divorces, new grandchildren, etc. See if your existing plan takes account of your current circumstances and, if not, consider how – and whether– those changed circumstances should now be factored into your plan. Example: Do beneficiaries need to be added or deleted? Do the gifts to beneficiaries need to be modified?
2) Review Your Financial Accounts To Check Titles
Review your bank and stock brokerage accounts to verify that the titles of same are correct and coordinate with your existing plan. If you have a Living Trust, are the account designations in the names of the Trustee(s)? If so, and if they are still in the names of yourself and your wife as trustees, you should advise each of your financial custodians of the passing of your wife, and provide them with an Amended Certificate of Trust, showing that you, alone, are now the sole trustee and sole manager of the accounts.
3) Amend Your Existing Certification of Trust & Advise Your Financial Custodians
If you have a Living Trust, it is likely that the attorney who prepared that trust also prepared something called a Certification of Trust, which is a kind of summary of the trust created for you to give to your banks and other financial custodians, and which provides them the identities of the trustees, their powers, and related information. This document should now be amended to provide that you, alone, are now the sole successor trustee. While doing so, check the further successors who would assume responsibility after you, and verify that the list, and the order of succession, still meets with your wishes and that the designated successors are willing to “step up” when the time arises.
4) Consider Time Limits to Take Certain Actions
Many estate plans permit the surviving spouse to take a “second look” at the plan of disposition, and make appropriate changes, such as in the designation of beneficiaries, the shares of beneficiaries, and the like. These provisions may include options called “Disclaimers” and/or “Powers of Appointment”, and generally permit the surviving spouse to modify the plan of disposition based upon later circumstances. A Disclaimer, for example, would permit the surviving spouse to decline all or a portion of the estate left to him or her, so as to accelerate that bequest to the next in line, typically the children, and thereby avoid a second trust administration and, in some cases involving larger estates, a second estate tax. Also, if your estate is large enough, you may need to file federal and state estate tax returns, which typically is due within 9 months of death. Even if not currently larg enough, still you may also wish to file a return just to preserve your wife’s Unused Estate Tax Exemption, for possible later use by your successors upon your own demise.
5) Possible Sale of Home to Preserve Double Tax Exemption:
If you plan on moving into a senior living facility, for example, and are considering selling your home to help finance that move, you may wish to do so within 2 years of your wife’s passing, so that you can still use her exemption and thereby take full advantage of the capital gain “double tax exemption” for sale of a personal residence. That tax exemption, available to shield capital gains tax for individuals who have lived in their home for at least 2 of the previous 5 years before sale, is $250,000 per person but is $500,000 for a married couple. For a period of 2 years after her passing, you could still claim your wife’s exemption and shield that much more of capital gain.
6) Review & Update Estate Planning Documents For Successors
In addition to reviewing your trust, you should also review your own Will, Durable Power Of Attorney, and Advance Health Care Directive, to make sure that you have someone, other than your wife, who can step up and take charge when the need arises. My suggestion is that you should name more than one successor, “just in case” the first successor is unwilling or unable to take charge. Married couples will typically name each other in the first position, and their children next, in whatever order the couple deems appropriate. If that is your plan, check with your children to make sure they are still willing and able to step up when the need arises. You should also review and update your HIPPA Medical Release form, so that your trusted family members can discuss your health situation with your doctors and access medical records as necessary.
7) Consult with an Estate Planning Professional
An estate planning attorney can help you review and understand more fully your current circumstances and advise in regard to any changes that may be appropriate. While it may be emotionally difficult to review your planning during this difficult time, consider it an act of love for your family.

Posts By: Gene Osofsky

Q.  Last year around this time, you wrote an article on year-end gift planning, but I cannot find the copy I saved. My wife and I are considering making large gifts to our two children to help them remodel their homes, and we would like to do so in a way that is “tax wise”. Can you publish it again, please? A.  Sure, and I have actually updated it with the new Gift amounts for this year and next. Many people mistakenly believe that one cannot gift more than $17,000 per year / person without incurring a gift tax. Not so! In fact, an individual can currently gift more than $12 million during his or her lifetime without incurring a gift tax! Here is the way gift taxes work:
Annual Exclusion Gifts: No Gift Tax Return Required:

1) $17,000 Per Year: The federal tax law permits you to make an Annual Exclusion Gift Amount, i.e. the amount that may be gifted to any person without filing a Gift Tax Return. In 2023, it is $17,000 per recipient, and in 2024 it increases to $18,000 per recipient. Such gifts are called Annual Exclusion Amount Gifts (“AEA Gifts”) and you can make such gifts to as many persons as you wish each year, provided that you make only one such annual gift to each gift recipient. No Gift Tax Return is required for these gifts.

2) “Doubling Up”:  If you and your wife are in a position to do so, together you can actually double that amount for each gift recipient. So, together, you could gift a total of $34,000 to each child in year 2023, without the need to file a Gift Tax Return or incur any gift tax.

3) “Year End Straddle”: If you act before the end of this current year (2023), you could each gift $17,000 to each child ($17K X 2 = $34,000). Then, on or after January 1, 2024, you and your wife could do the same thing once again, albeit at the higher rate of $18,000 per child, as you would then be in a different tax year.  So, over the course of a period as short as a calendar week – provided that the week straddles both the last days of this year and the early days of next year — the two of you could, together, gift away a total of $70K ($34K in 2023), plus ($36K in 2024) without the need to file a Gift Tax Return or use any of your lifetime exemptions. I call this strategy the “Year-End Gift Straddle”.

Gifts Above the Annual Exclusion: Gift Tax Return Required

1) Lifetime Exemption: If you choose to make gifts above the Annual Exclusion Amount (“AEA”), then you can still make them gift tax free by using a portion of your Lifetime Exemption (aka, the “Unified Credit”). That Lifetime Exemption is currently $12.92 million per person for U.S. citizens in 2023, but increases to $13.61 million per person next year (2024). AEA gifts do not count against this exemption, and they can be made in addition to Lifetime Exemption gifts.  Also, by making a timely election after the death of a spouse, the surviving spouse can opt to preserve the deceased spouse’s unused Lifetime Exemption for the survivor’s own later use, thereby effectively doubling it. This is called “portability” and would allow a married couple– beginning next year (2024) — to effectively give away $27.22 Million over their two lifetimes without incurring any gift or estate tax. Caution: This generous Lifetime Exemption is set to “sunset” (end) for those persons dying after 12/31/2025, and to then return to the prior much lower exemption, unless Congress extends the current exemptions contained in the Tax Cuts and Jobs Act of 2017. That prior, lower exemption would be only $5 million per person plus an inflation add-on.

2) Gift Tax Return:  To the extent that your gifts exceed the Annual Exclusion Amount, you must file a Gift Tax Return. But no gift tax would be due so long as your cumulative gifts are less than the Lifetime Exemption. Reason for the Gift Tax Return: the IRS wants to track your use of your lifetime exemption, so that it knows how much you have left to use upon death. Example: if you used $1 million of your lifetime exemption to make gifts during your lifetime, then your remaining exemption to apply against estate taxes upon death would be $1 million less. Remember, though, that gifts within the AEA exclusion do not count against your Lifetime Exemption.

3) Rules May Be Different for Non-US Citizens: Note that the rules for persons who are not U.S. Citizens may be different. Consult your tax advisor if you are in this group.

Caution:  Before making large gifts, be sure that you can afford to do so. If there is a possibility that either of you may need to apply for a Medi-Cal subsidy for Long Term Care in the near future, you should first consult an Elder Law Attorney or other professional with special knowledge about the Medi-Cal program, as such gifts – depending upon when and how they were made– may impair your eligibility for a Medi-Cal subsidy unless they were handled in a very special manner.

Posts By: Gene Osofsky

Q,  My best friend of many years is in the hospital and is not able to tell her doctors her wishes regarding medical care. She has no close family members and–unfortunately– has not designated a Health Care Agent in writing, nor is she now capable of doing so. Is it possible for me, her long time friend, to speak for her?

A. Yes! Under a new California law effective this year (2023), in the circumstances you describe, her doctors are now permitted to select a medical “surrogate” (agent) to make health care decisions for your friend. The new law, known as AB 2338 and now codified in CA Probate Code § 4712 provides that where, as in your friend’s case, she has not designated a Health Care Agent/Surrogate in a written Advance Health Care Directive, and is not capable of designating someone orally, that her health care providers may now choose a “surrogate” for her. The choice would be from a list of adults persons, whom the her health care providers determine..

“..has demonstrated special care and concern for the patient, is familiar with the patient’s personal values and                  beliefs to the extent known, and is reasonably available and willing to serve.”

The choice would be from the following list of persons, without any preference in hierarchy:

1) the spouse or domestic partner of the patient;

2) an adult child of the patient;

3) a parent of the patient

4) an adult sibling of the patient

5) an adult grandchild of the patient

6) an adult relative or close personal friend

While other states with similar laws have opted to designate a preferential hierarchy, the new California law purposely does not! This decision was intentional and was apparently the subject of much debate, and was made in recognition that families and relationships are not all the same.

So, now, your friend’s doctors are free, in the circumstances you describe, to choose you to speak for her, as a “close personal friend” who has “demonstrated special care and concern…is familiar with [her] personal values and beliefs…and is reasonably available”. Some feel that the new law now gives legal legitimacy and protection to what doctors have long been doing, albeit informally, in circumstances where the patient could not speak for herself.

Good wishes to you and to your friend. She is lucky to have you by her side.

 

Posts By: Gene Osofsky

Q.  Our parents are up in years and have become increasingly frail. I know that they both have definite wishes about advance care planning and end-of-life decisions. Any suggestions on how we might help them make sure that their wishes are honored?
A. Yes, I do.  The first step is to begin the conversation.  There is an excellent “Conversation Guide” prepared by the California Coalition for Compassionate Care that is available for free download at finalchoices.org  or by calling 916-552-7573.   It is not necessary to conduct the entire conversation in one sitting. Instead, it can be an extended discussion that is raised from time to time, just in case your parents’ wishes change over time.  One of the best ways to ensure that their wishes are honored is for you to help them communicate their wishes to their family and physicians.
In terms of legal documents, I also suggest that your parents sign an Advance Healthcare Directive, which expresses their end-of-life wishes and appoints a health care agent to implement them if they are unable to do so themselves.  They can either sign a preprinted form or they may have a customized document prepared by their estate planning or elder law attorney.  Please Note:  While this is a very valuable and important document, studies do show that end-of-life decisions are, unfortunately, not honored as often as most people think. Sometimes the signed directive is not available at the time of need, or it is not clear, or the designated agent is just unwilling to give up the hope that further treatment may restore their loved one’s health. We therefore recommend that your parents also take the following further step in the following circumstances:
For persons faced with a serious or potentially terminal illness, they should initiate a discussion with their physician with the idea of jointly signing a document known as “Physician Orders for Life-Sustaining Treatment (“POLST”).  This is an innovative medical form recently created under California law that allows patients to specify what kind of care they wish at the end of their life. The most important feature, and the one that distinguishes it from the Advanced Healthcare Directive, is that the form is signed by the patient’s doctor and becomes an actual physician’s order. As such, it carries special weight because it must be honored by all medical personnel involved in treatment.  Your parents’ physician, rather than any designated agent, would have responsibility for implementing your parents’ wishes.  By doing this, your parents can relieve you and your siblings of the responsibility of making the final decisions.
The POLST form is designed to become a permanent part of the patient’s medical records and to travel with the patient as he/she moves from one treatment facility to another. It is printed on bright pink paper so that it is easily identifiable in the patient’s chart. At least one study has shown that patients who had properly executed POLST forms had much less unwanted hospitalization and medical interventions.
For more information on Advanced Healthcare Directives and the POLST form, you may either visit our own website (www.LawyerForSeniors.com)  or you may contact the Coalition for Compassionate Care of California at 916-489-2222 ( www.capolst.org), or the California Medical Association at 1-800-882-1262 (www.cmanet.org).
Remember, that opening this conversation is an act of love for all parties.

Posts By: Gene Osofsky

Q. My husband was just diagnosed with Alzheimer’s, but still seems to be generally okay. Are there legal steps we should take by way of planning for the future?

Yes. Once you or loved one has been diagnosed with Alzheimer’s, it is important to take action to get your affairs in order. Here is my short list of suggestions:

  1. Check Your Long-Term Care Insurance Policy. If you are lucky enough to have a long-term care insurance policy in place, check its benefit provisions, especially its “benefit triggers”.  Many policies are triggered by an inability to perform 2 out of 7 activities of daily living, i.e. eating, dressing, bathing, toileting, ambulating, transferring and continence.  Check for waiting periods, cost-of-living adjustments, lifetime caps, and the extent to which the policy covers care in the home.  Some policies also provide an option to increase benefits periodically without new medical examinations and, if so, consider opting for such benefit increases now, or as soon as eligible to do so.
  2. Check Your Life Insurance Policy for Early Benefit Options. Some life insurance policies offer an option to accelerate benefits under certain conditions, such as the need for long-term care. Check with your insurance company to see whether yours offers an Accelerated Death Benefit.
  3. Consider Applying for a Reverse Mortgage Line of Credit. If you or your spouse are over age 62, consider applying for a Reverse Mortgage (RM) line of credit to draw upon in the event of future need.  To qualify for a reverse mortgage, it is usually necessary for both spouses to receive counseling and sign numerous loan documents.  It is best to do this when both of you are able to fully participate in the process.  Also, just because you have a RM credit line, does not necessarily mean you have to draw upon it; instead, consider it as a stand-by source of emergency money for care expenses should the need later arise.
  4. Check Availability for Veterans Pension. If you or your spouse is a veteran, check with the VA to determine whether you might qualify for a veteran’s pension to help with care expenses.
  5. Review Beneficiary Designations. Review the beneficiary designations on insurance policies, IRA accounts, annuities, bank and brokerage accounts, and the like, to make sure they still conform to your wishes.  Many people designate beneficiaries when they initially set up their accounts and, over the years, neglect to review and update them as family circumstances change.
  6. Have Your Estate Planning Documents Reviewed. Make sure you have in place good quality estate planning documents, such as Advance Health Care Directives, Living Trust & Will, and Durable Powers of Attorney. You might consider changing the nomination of your husband as your Agent under your Power of Attorney and Health Directive, and he might consider voluntarily resigning as a Co-Trustee of your joint trust so as to avoid the need for you to seek out a medical opinion of incapacity when it becomes necessary for you to assume sole trusteeship of your trust.
  7. Consider Availability of a Medi-Cal Subsidy to help with Long Term Care Expenses: Check to see if your spouse would qualify for a Medi-Cal subsidy to help with care expenses, whether in the home or at a facility outside the home.

Overall, I suggest arranging for a review of your documents by an elder law attorney with experience in helping families in your situation.  Revising your documents now to address this new development may help you manage your affairs and finance the future cost of your husband’s care without placing your own welfare and financial security at risk.

 

Posts By: Gene Osofsky

Q. My mother just died, and her Will leaves her estate equally to us three children. I am fairly well-off, but my two brothers are not quite as fortunate. Is there a way that I can redirect some or all of my share to them in a tax efficient way?

A. The answer may very well be “yes.” One way to accomplish this is by the use of a disclaimer. A disclaimer is a renunciation of one’s right to receive a gift or bequest, whether the gift is left in a will, trust, or by beneficiary designation.

However, whether it will accomplish your purpose in routing your share to your siblings depends upon how your mother structured the bequest in her will. Here is why: in order for a disclaimer to be effective, it must pass to the next person in line without any direction on your part. In other words, it must pass to the successors whom your mother, herself, has chosen to take in the event you predeceased her. A couple of examples will help illustrate the matter:

Example #1: let us suppose your mother’s will recites as follows:

“ I leave everything to my three children, equally, but if any of my children predeceases me, then I leave that deceased child’s share to my other surviving children, equally.”

Example #2: now, let us suppose your mother’s will, instead, recites as follows:

“ I leave everything to my three children, equally, but if any of my children predecease me, then I leave that deceased child’s share to his own surviving children”.

In example #1, your mother provides that the share of any predeceased child would go sideways to your siblings, while in example #2, she provides that it would go downward to the deceased child’s own children. In example #1, a disclaimer by you would accomplish your purpose, but a disclaimer by you in example # 2 would not.

A disclaimer is treated as if the disclaiming beneficiary had predeceased the decedent. So, before exercising a disclaimer, it is very important to first determine whom the decedent, herself, has selected as the successors. If the decedent died without a will, then the successors would be determined by state law.

The nice thing about a disclaimer is that it is treated for tax purposes as if you never owned the asset; it passes to the successors without any adverse tax implications to you. As a result, a disclaimer can be a very tax efficient way of doing post-mortem planning. By contrast, if you first accept your share and then re-gift it to your siblings, the gift tax scheme would be implicated: you would need to file a Gift Tax Return for amounts over $17,000 per recipient (in year 2023), and the gifts to your siblings would reduce your own lifetime exemption from gift and estate tax (currently $12.92 Million per person, in 2023), making less available for you later on to shield bequests to your own beneficiaries. Note: that current, high estate tax exemption of $12.92 Million per person is scheduled to reduce dramatically for persons dying after 2025, unless the federal tax law is statutorily amended before then.

To be effective, a disclaimer must meet certain requirements: it must be in writing, it must be made before you accept the gift or any of its benefits, and it must be made not later than nine months after your mother’s death. Caution: a person receiving public benefits, such as Medi-Cal or SSI, should never make a Disclaimer without getting professional guidance, as doing so would be treated as a prohibited transfer of assets and could jeopardize continued eligibility for public benefits.

Posts By: Gene Osofsky

Q.  When I signed my Power Of Attorney a few years back, my primary and successor agents lived at different addresses and had different phone numbers than they do now.  In order for it to remain valid, do I need to completely re-do it?

A. I do receive this question from clients from time to time, so know that you are not alone in wondering.  The short answer is: no, you do not need to completely re-execute your Power of Attorney (“POA”).  What I suggest you do is type up their current addresses and phone numbers on a separate sheet of paper, date and sign it, and attach it to your original POA and to all copies as well.  Although not required, it might also be a good idea to have your signature notarized, just to lend a further auro of reliability to the document. You might also include their current email addresses, as many folks now rely heavily upon email. Call the document something like” “Updated Contact Information for My Agents & Successors”. Do the same with regard to your Advance Healthcare Directive and any other estate planning document which recites the former addresses of your agents or successors.

If you, yourself, have also moved, include your new address, phone and email as well, so that the contact information will be complete.

However, if you have moved to another state, then I would advise seeing an attorney in that new state and arrange for that attorney to prepare a new POA for you in compliance with the laws of that state. I would advise the same with regard to your Advance Healthcare Directive and any other estate planning documents prepared while you were a resident of California, such as a Trust and Will.  That way you will remain in full compliance with the law applicable to the state of your new domicile.  Good wishes.

                                                 ****************

Posts By: Gene Osofsky

Q.   My wife and I created a Living Trust back in the year 2001.   We never thought to have it reviewed or updated.  She recently died and I just re-read our trust.   To my surprise, it requires that her half of our assets go something called a Bypass Trust and greatly limits my access to that portion.  This comes as a surprise, as we always intended everything to go to the survivor without restrictions.   Am I now stuck with this arrangement or is there anything I can do? 
A.   There is something you can do, but it’s helpful to first understand the background:  At the time that you and your wife created your trust the tax laws were quite different than they are today.  Back then, the estate tax exemption was only $675,000 per person, and the first spouse’s exemption died with her unless the couple had signed a trust directing the deceased spouse’s share of assets into a ByPass sub-trust. (The ByPass was sometimes called a “B Trust”, Credit Shelter Trust, Family Trust, or Exemption Trust).   This Bypass sub-trust was designed to preserve the first spouse’s exemption so that – at the survivor’s later death – their two exemptions could be combined, thereby doubling the assets that the couple could pass estate tax free to their children or other beneficiaries. That appears to be your situation.
However, these trust “split” arrangements came at a price:  The survivor no longer had unrestricted use of the decedent’s share of marital assets, was required to keep separate accounts and was obliged to file fiduciary income tax returns each year for the ByPass Trust.  Further, the assets placed into the Bypass portion usually did not get a second “step up” in tax basis upon the survivor’s death, and the trust split interfered with Medi-Cal planning if nursing care was needed.  Most surviving spouses found these restrictions onerous.
However, the estate tax exemption has increased many times since then, and the current exemption amount for persons dying in the year 2023 is $12.92 Million per person, and married couples may double that exemption by filing a timely election after the first death.  Given the current exemption, a ByPass Trust is no longer needed for most couples. The problem is that many couples still have these outdated trusts in place and, like you, only learn of the trust split requirement upon the death of their spouse, when the terms of the trust can no longer be changed by an amendment.
Good news: While the terms of your trust cannot now be changed by you, alone, there is still a remedy: you can petition the superior court for an order reforming the trust to eliminate this restrictive trust split requirement.  Your court petition would be based upon “changed circumstances” that were not known or anticipated at the time the original trust was created.   Since most of these trusts were created years ago for tax savings purposes, the change in tax law dramatically increasing the exemption usually qualifies as the requisite “changed circumstances”.
In our experience, judges have been receptive to this analysis and have issued orders reforming these older trusts to eliminate the sub trust requirement, so as to permit all assets to go to the survivor.  The key is to petition the court for relief soon and before you take steps to split assets and/or file tax returns.
Further, in some cases, it may be possible to reform your older trust without court involvement under the recently adopted California Decanting Act.
We suggest reviewing these matters with your attorney to see if your trust might qualify for reformation, and thereby accomplish the result that you and your wife originally intended.

Posts By: Gene Osofsky

Q. My brothers and I plan to buy a home together, and wonder whether we should take title to the home as joint tenants or as tenants-in-common. Can you explain the difference?

A. Sure. There are distinct differences between these forms of ownership. The principal differences pertain to the equality of ownership and the right of survivorship. Here is the breakdown.

Joint Tenancy: For owners of property to qualify as Joint Tenants, the property must be (1) acquired at the same time, (2) by the same deed which clearly states that the owners are joint tenants, (3) the interests of all joint tenants must be equal, and (4) each must have the right of full access and possession of the property. These four requirements are often called the “4 unities” in the law of joint tenancy. If so acquired, this form of ownership creates the following right of succession: upon the death of the other joint tenant(s), the last surviving joint tenant takes ownership of the entire property, without probate or other proceedings. This right of survivorship is one of the most important features of Joint Tenancy ownership.

Tenancy-In-Common: By comparison, persons who own their interest as Tenants-In-Common can have different percentage interests in the property and can acquire their interests by different deeds and at different times. Further, upon the death of a Co-Tenant, his interest goes, not to the other co-tenants, but to his own beneficiaries or heirs.

In terms of succession upon death, it is sometimes helpful to think of Joint Tenancy as requiring, upon death, a “sideways” movement of ownership to the other surviving Joint Tenant(s), whereas upon the death of an owner holding his interest as a Co-Tenant, the succession moves “downstream” to his/her own heirs or beneficiaries.

Because of the right of survivorship, married couples will often hold title to their home as Joint Tenants, as most couples typically want the surviving spouse to acquire ownership of the entire home or other property, which would then occur without the need for probate. By contrast, co-owners who are friends, business partners, or even siblings, who may have their own families, would – upon their own death – typically wish their interest to go down to their own family members, and not to the other surviving co-tenants. This difference is significant.

In your situation, you indicate that you plan on making a purchase with your siblings. I presume that, if any of you passed away, each brother would want his share to go to his own family, which may include his own spouse or children, rather than to the other brothers. In that event, you would want to acquire title as Co-Tenants, so that this preference is clear.

An important comment about joint tenancy: if a joint tenant conveys his/her interest to someone else, or even to his own trust, that transfer may sever the joint tenancy, eliminate the right of survivorship, and create a Tenancy-In-Common. So, be mindful about such transfers when you do your own estate planning.

Posts By: Gene Osofsky

Q.  My husband and I would like to make wills, but I am concerned because he has been recently diagnosed with early-stage dementia. Legally, can he still make a will?

A.  It depends, but very often the answer would be yes. Under the law, he must have what is called “testamentary capacity”. This means that at the time he signs a will he must understand what he is signing and the implications of making a will. Simply because he has been diagnosed with a form of mental illness or disease process, does not necessarily mean he lacks legal capacity to make a will.

Generally speaking, he would be considered mentally competent to make a will if: (1) he is able to understand that he is making a will, (2) he understands the nature and extent of his property, which means he understands what he owns, and (3) he knows and understands who his family relations are.  Further, he would only need to meet these requirements at the time he signs his will.  Some persons are more lucid at certain times during the day, and he should sign his will during those lucid periods.

A related question is whether he would also have sufficient capacity to make a trust. The question here is whether signing a trust requires a greater degree of capacity than signing a will, as trust documents are usually more complex.

A few years ago a California court addressed this question in a case called Andersen vs Hunt. In that case, a father made an amendment to his original trust, created years earlier, to leave a 60% portion of his estate to his longtime romantic partner, thereby reducing the share going to his three children. When the father died, his children contested the trust on the ground that their father lacked sufficient capacity, urging that the act of creating a trust required a greater degree of capacity than signing a will.  On appeal, the court upheld the trust amendments, concluding that they were rather simple in nature and therefore the law concerning the capacity to make a will should control. The lessons: (1) if a trust document were drafted to be relatively simple and straightforward, then the requirement of capacity would likely be construed under the more relaxed standard applicable to the making of wills; (2) alternatively, for a person whose capacity were questionable, perhaps a will would be the better choice.

If there is concern that capacity may later be questioned, it would be helpful to have evidence of your husband’s capacity at the time he signs the will or simple trust, such as a current letter from his physician attesting to his capacity and/or a video-taped pre-signing interview conducted by the attorney preparing the will.

If your husband has sufficient capacity to meet the relaxed standards for making a will, or even a simple trust, I would urge him to do so as soon as possible. Further, if he does not plan to disinherit any children, or to treat them differently in the overall division, the chance of a later contest is much reduced.