retirement planning

How to Handle Medical Care, Dementia, Asset Management and Inheritance for Foreign Nationals Living in Japan’s Super-Aging Society

With the number of elderly people rapidly increasing, Japan has become what is known as a "super-aging" society. In addition, due to advances in medical care and treatment, the elderly are living even longer than before. This has given rise to new issues such as medical care for the elderly, incapacity, asset management, and post-death considerations.

These are all legal issues which are relevant to foreign nationals living in Japan. In this sense, “legal issue” does not refer to suing or being sued. Rather, it refers to the necessity of obtaining legal advice and taking certain measures in advance to avoid you (or your heirs or executors and the like) suing or being sued. 

Medical Care and Treatment for the Elderly

When receiving medical care or treatment, an older person naturally wants to receive enough information and explanation from the physician (or other healthcare professional) to be able to consent to a plan of treatment and to have the autonomy to make their own decisions. However, as the capacity to make decisions diminishes, physicians (or other healthcare professionals) may tend to consider an older person incapable of making sound judgments, and consequently may rely on the family members to make decisions on behalf of the older person.

This can be especially problematic at the end of life.

Let’s consider just one example: gastrointestinal or other digestive diseases that prevent eating in the normal way; i.e. through the mouth. Would an older person want gastric feeding by banding the stomach if they unable to eat normally, i.e. through the mouth? On the other hand, would the decision be different if this feeding method is used until the patient dies. In Japan, families tend to want their relative to live as long as possible, and, for this reason, they often consent to gastric banding (and other medical or surgical procedures) after an receiving an explanation from a doctor about the procedure. As a gastric band, you will continue to receive nutrition directly from your stomach instead of by mouth for the rest of your life. However, you will live longer because your nutritional intake will improve.

Imagine this scenario. You are admitted to an elderly care facility with a gastric band where you are fed at mealtime in the dining room next to other residents who are eating and being fed by a gastric band. Is that what you would want? 

So then, what do you think about artificial respiration? 

To prevent this from happening, you need to make your intentions clear in advance. Unfortunately, unlike other countries, there are no laws in Japan that make your intention binding on healthcare professionals. Even so, if your wishes are clear, they will be respected.

Loss of Capacity and Asset Management Due to Aging and Dementia

 It is said that one in five elderly persons in Japan will develop dementia. In an aging society, this is a reality that many people may face someday, including you, of course.

Japan has an adult guardianship system to protect people with dementia. The adult guardianship system is divided into two main categories. One is a legal guardianship, where a court appoints an adult guardian, and the second is a voluntary guardianship, where a certain person is designated in advance as a guardian and a contract is entered to that effect.


If no planning has been done prior to the onset of dementia, only the legal guardianship can be used. However, there are several problems with legal guardianship, including the following: 

  • Not knowing who the guardian will be
  • Losing the right to make your own decisions
  • Even though there is a need for protection even before the court appoints the guardian, there is actually no protection until the guardian is appointed.

In a legal guardianship, a guardian is appointed by the court. Since the court has discretion to appoint anyone as the guardian, it is possible that someone who does not know you or your family at all will be appointed as the guardian. It is quite possible that one day a  complete stranger claims to be your guardian and starts managing your savings and other assets.

In addition, once an adult guardianship begins, the guardian is tasked with managing your assets, which means that you will not be able to spend money in the same way you would if you were in good health. You will no longer be able to decide for yourself how your assets will be used.

Furthermore, since cognitive ability deteriorates gradually, rather than all at once, protection in response to deteriorating cognitive ability is naturally necessary.  However, until a guardian is appointed, you are not entitled to any protection. 

On the other hand, voluntary guardianship can overcome the demerits of legal guardianship by combining a voluntary guardian with a trust or other mechanisms. In short, you can decide in advance who will be your guardian, how your assets will be managed, and how the assets will be used through a trust or other means, and have your voluntary guardian watch over your assets for you if and when your cognitive ability becomes impaired.

If you are willing to accept the disadvantages of a legal guardianship, there is no need to take any steps now. If not, you may want to start planning for your golden years now.

Succession of Assets

It is inevitable that we all will die and when that happens, certain procedures are necessary to pass the assets of the deceased on to his or her heirs.

The major problem for surviving family members is that when a bank is told that the deceased has died, all bank accounts of the deceased will be frozen and it will be impossible to make any withdrawals from these accounts. Since joint accounts are not allowed in Japan, the heirs will not be able to use the deposits in the bank accounts of the deceased unless proper inheritance procedures are taken.

This inheritance process can take up to a month after all the documents are in order and processed at the bank. It is not unusual for the inheritance procedure to take longer than usual, especially for foreigners, since the typical legal professionals are not accustomed to the inheritance procedures involving foreign issues; and the same is true for Japanese banks. Thus, it may take two, three, or even more months from the time of death until the deposits in the bank accounts of the deceased are available for use by the heirs.

So what can be done to lessen problems for the families of the deceased?

Nonetheless, it is certainly still advisable to take steps to expedite the inheritance procedures for the succession of assets to the heirs. There are two main measures that can be taken: wills and trusts.  

Identifying the persons who will inherit your assets will make the process go much more smoothly than not having a will at all. For foreign nationals, we strongly recommend leaving a will since the inheritance procedures when there is no will are completely different!

A trust can have the same effect of a will by leaving the management of your assets to a family member while you are alive as a step to avoid problems in the event of dementia, and designating who will inherit your assets upon your death. Since the assets are passed on as stipulated in the trust, the process of distributing assets to the family members is much smoother than an inheritance procedure under a will or a scenario where this is no will. 

However, when considering your options, there are certain points that you should keep in mind. Both wills and trusts must be prepared in strict accordance with Japanese laws and Japanese procedures. Even if you follow the relevant laws and procedures in your home country, you may not be able to avail yourself of the related procedures in Japan, which could make the entire process more time-consuming, not to mention more expensive! Our strong recommendation is that the inheritance of assets located in Japan should be subject to Japanese laws and procedures. 

In addition to wills and trusts, another option is life insurance. Once the family has submitted an application for payout on the life insurance policy, the payout will generally be transferred to the beneficiary within a week or so. The receipt of the life insurance payment will make it easier for the beneficiaries of the insurance policy (who are also heirs) to defray some costs and delay others. Finally, life insurance payments up to a certain amount are not subject to inheritance taxes and can be used as a means to reduce inheritance taxes.


Even for foreign nationals living in Japan as an aging society, you may encounter various problems related to aging. What you decide and what you choose can significantly impact the costs and expenses for designated heirs or other claimants. Please keep in mind that the impact on you and your family will differ greatly depending on whether or not you have taken measures to deal with them!

Why not consider retirement planning by making good use of the methods described here, such as voluntary guardianship, trusts, and wills?

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