Posted on September 25, 2017 by Lasher Holzapfel Sperry & Ebberson
Heirs battling over seemingly “small” personal property items after a loved one has died is a heartbreaking yet familiar scenario in the probate world. While such disputes might seem petty to outsiders, the issue of who gets mom’s favorite purse, dad’s music collection, or even grandmother’s little blue ceramic bowl is often a deeply personal process that can cause permanent damage to family relationships and result in legal costs far exceeding the value of the assets themselves.
Giving some thought to tangible personal property in your estate planning, and providing direction in your Will or Living Trust as to how you want to have these assets distributed, is itself a gift to those you love. Below are some things to consider in respect to tangible personal property assets when embarking on your estate planning process:
What is tangible personal property?
Tangible personal property is your “stuff” – i.e., clothing, jewelry, household goods, furniture, antiques, dishware, vehicles, books, pets, collectibles (including stamps, coins and ceramic cats), personal papers, photos, knickknacks, airline miles, rewards programs, etc. They are part of your estate, and you can direct that these items pass to certain heirs in your Will or Living Trust.
Consider discussing sentimental or high-value tangible items with your family.
Finding out which tangible items mean the most to your heirs can help identify potential conflicts regarding special items and allow for compromise while you are still available to facilitate dialogue. This can minimize the chances for an expensive and relationship-damaging dispute among your heirs after you are no longer with them.
Specificity in your bequests provides clarity to your heirs.
Once you have identified the persons to receive an item of sentimental or other high-value property, try to be as specific as possible in describing the item. This issue came up in Robin Williams’ estate, due to his specific bequest of “memorabilia and awards in the entertainment industry” to his children. Upon his death, his widow interpreted that clause to be limited to entertainment-related items only and, as reported in the New York Times, demanded that all of the non-entertainment-industry items, such as Mr. Williams’ bicycles and his collections of fossils, and toys, pass to her. The uncertainty in a term as seemingly innocuous as “memorabilia” resulted in painful litigation between the widow and children.
There are many methods for directing the distribution of tangible personal property.
Once you have decided on a specific bequest, it should be included in your Will or, as allowed under Washington law, in a signed and dated separate writing referenced in your Will or Trust, and executed in compliance with state law. Even with a separate writing, which is much less formal than a Will, it is important to provide your estate planning attorney with the writing to ensure that the bequest is worded properly and carries out your wishes.
That said, not every item of tangible property that you own could or should be listed in your Will or separate writing. To do so would create lengthy and unwieldly documents, not to mention certain confusion. For tangible personal property not itemized the specific bequests, your Will should include instructions as to which heirs are entitled to receive your tangible personal property generally, and how your executor should allocate specific items among them. Some common methods of allocation are:
- Agreement of Heirs. Heirs divide the tangible assets by agreement as of a certain date, often with a direction that the shares must be substantially equal in value. This method likely needs a backup method to be identified, just in case the heirs fail to agree.
- Sell Property and Split Proceeds. Executor sells all of the tangible items (or the items in dispute) and split the proceeds among the heirs. The obvious downside to this method is the low dollar value often received and the loss of sentimental property from the family.
- Lottery. Family members each select a number out of a hat and then take turns choosing items (or groups of items based on value) based on the ordering system determined from the drawing. This method can result in shares of lopsided value if there is no mechanism for dealing with high-value items, and may need to be paired with an equalization clause so that funds from another part of the estate can be used smooth out the overall shares.
There are many other methods available to distribute tangible personal property, and your estate planning attorney can make recommendations as to the method(s) that might best fit your specific family situation.
In closing, although it may seem daunting to consider how to pass on to the next generation a houseful of tangible property accumulated over a lifetime, this is something that estate planning attorneys handle and advise on regularly. Because of the unique nature of these assets and potential for high sentimental value, it is worth your time to discuss these assets with your attorney when planning your estate. If you would like advice on tangible personal property bequests and how to incorporate them into your estate planning, please contact one of our estate planning attorneys at Lasher Holzapfel Sperry & Ebberson to set up a consultation.