Gathering your personal possessions and deciding who to distribute them to can be one of the most difficult tasks when creating an estate plan. To avoid family feuds after you are gone, it is important to have a plan and make your wishes clear to those you leave behind.
When passing on personal belongings to your heirs, savings, investments, and other financial accounts are easy to divvy up amongst your loved ones. Real estate can also be turned into cash (if you wish for the property to be sold upon your death) or co-owners can share ownership. The most difficult items to divvy up are personal possessions—silverware, dishes, artwork, furniture, tools, jewelry — items that are unique and don’t have a set resale value. In legal speak, these are known as “tangible personal property” and can become the focus of family arguments. Often one or more children claim that a parent had “promised” them a particular item that they would give to them. Things may disappear from a dwelling shortly after (or even before) a parent’s death, or a child may claim that her 90-year-old mother with dementia “gave” her a cherished diamond ring during life. These types of situations can create great suspicion and irrevocably split families causing siblings and other loved ones to not communicate for many years.
Clarity about your wishes can go a long way toward avoiding these difficulties. Also, it is important that your executor or trustee secure your residence as soon as possible after death to make sure items do not go missing. Here are a few steps you or the executor of your estate can take to make sure dividing your stuff does not divide up your family:
Direct specific items you want to be sold. If you have one or more possessions that have much greater value than others, it can be difficult to make your distributions equal. It may make more sense to sell the items of greatest value and distribute the proceeds from the sale amongst your loved ones equally. For example, in a family whose parents were able to save one painting by a famous artist when they fled Europe during the Holocaust, the children sold the painting and split the proceeds equally, since it would not have been fair for any one of them to have received the painting and none had the resources to buy out the other two. The painting was auctioned at Christie’s, the proceeds were split between the siblings, and ultimately avoided an argument that could have lasted for generations.
List the most important items in your estate plan. While your will could get very long if you tried to list all your possessions, you may have a few family heirlooms or valuable artworks that you want to stay in the family. It may be easier for all concerned if you say who should get what specific item.
Utilize the Memorandum Regarding Personal Property. Hegwood Law Group includes a Memorandum Regarding Personal Property as part of your estate plan. This document allows you to direct which personal belongings are to be distributed to a specific person. If your will references the memorandum, the executor will know what to do with the specific property. Be careful about how you describe each item so that there is no confusion – each item should be listed with every detail. Unlike your will, this list can be as long as you like, and you can change it without having to go back and redo your will.
Give everything away now. Well, perhaps not everything, but the more you disburse during life, the less that will have to be dealt with upon your death. When you make gifts, make sure that everyone knows about it so that the person receiving the gift is not suspected of having ransacked your jewelry box, for example. There may be items that you would like to give away, but still want in your house, like artwork and furniture. If the person you are gifting the item to is agreeable, you can keep these items around. You might want to tape a note to the back or underside explaining that the China set in the dining room, for instance, belongs to your daughter, Jane. Be aware that for highly appreciated property, for tax reasons, it may be better not to make gifts during life because they will lose the step-up in basis. So, check with your experienced estate planning attorney or tax accountant first. Also be very careful about gifting when you don’t have long term care insurance or a plan to take care of you if you become incapacitated.
Get an appraisal. For the tax reasons referenced above and to guide you in deciding who should get what item, it can be useful to know the monetary value of the items you are giving away, whether it is during life or upon your death. This can also be very important for your executor or trustee in order to distribute the assets.
Use a lottery. If you do not want to make choices regarding your estate plan, you can instruct your executor to set up a lottery system for distributing your personal assets. The executor can put names or numbers into a hat and someone can draw them out to determine the order in which the family members or other heirs will choose items. To initiate the process, the personal representative should create a list of the most valuable items, including their appraisal value if one has been obtained. If everyone is in the same location at the same time, they can simply take turns picking the items they want. If that is not possible, the personal representative can add pictures to the list to help identify the items and your beneficiaries can choose online or some other way of informing your executor of their choices as their turns come up.
The more you decide who gets what item rather than leaving the decisions to your family, the less likely the distribution process will create family strife. Hegwood Law Group will assist you in making sure your wishes are clearly stated so your family can focus on what is important upon your passing – being together. Contact our office to schedule your strategy session today to learn how to keep your family together when you are no longer here.
Written by Kimberly Hegwood, an experienced Texas Elder Law and Estate Planning Attorney and the founder of the Hegwood Law Group, PLLC in Houston, Texas. Attorney Hegwood is a Member of the National ElderCare Matters Alliance, and she and her law firm have a Featured Listing on ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources to help families plan for and deal with the Issues of Aging.
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