Sometimes Stuff Is the Most Important Part of Your Estate Plan
People often overlook personal items in their estate plans, focusing instead on major assets. Yet, these personal belongings, with their sentimental or financial value, demand careful planning too. When developing your estate plan, ask yourself the following questions about your personal property.
Do your items have monetary or sentimental value?
Some items may have significant monetary value, like an antique clock, while others may have sentimental value, like your grandmother’s class ring. Different kinds of value, whether monetary or sentimental, require tailored approaches in your estate planning.
If Personal Property Has Monetary Value
Actively assess the monetary value of your valueables. If an item is highly valuable, it may need to be insured. A renter’s or homeowner’s insurance policy may limit what it covers and how much it will pay if your personal property is damaged or stolen. Also, if the item requires maintenance or upkeep, you must make sure that the person who receives it understands what is required so that the value does not decrease.
If Personal Property Has Sentimental Value
Personal items with sentimental value often lead to disputes among family members. Splitting these items among your loved ones without clear instructions can be especially overwhelming during a time of grief. This may be an even more compelling reason to document your wishes, so that everyone is on the same page. You should think carefully about who will receive sentimental items, and find ways to mitigate future conflicts if more than one person wants the same item.
Will Someone Want Your Stuff?
When crafting your estate plan, it is important to understand what you have and who you want to leave it to. But you may also want to speak with your beneficiaries before creating your plan to find out if the person you plan to give an item to actually wants the item, particularly if the item has storage or maintenance requirements that the person will be responsible for.
If More Than One Person Wants an Item
When planning your estate, awareness of who desires certain items can prevent conflicts after your passing. It's crucial to decide how to distribute such items, whether by directly addressing it in your will or considering ways to equitably balance inheritances. For items that hold significant value or a collection of similar assets, careful thought should be given to who will receive them. Open conversations with your beneficiaries can ensure everyone understands your intentions, promoting harmony and avoiding disputes.
If No One Wants an Item
While an item may be incredibly important to you, it may not hold the same level of importance to your loved ones. As you put a plan together, determine what will happen if no one wants an item. You could choose to have it be sold, donated, or offered to an acquaintance with a similar fondness for the item.
Include Your Personal Property in Your Estate Plan
There are a few different ways you can share your wishes for your personal property through the use of an estate plan.
Specific Gift in a Last Will and Testament or Revocable Living Trust
A specific gift in a last will and testament (will) or revocable living trust (trust) allows you to specifically name who will receive a particular item. In either a will or a trust, you can specifically state, “I leave my blue antique vase with pink roses to my daughter, Susan Jones.” When you die, the executor or successor trustee will then give the vase to Susan. However, if you change your mind, the will or trust will need to be changed, which means you'll need to make and sign a new document the correct way.
Personal Property Memorandum
Another option that can be used in many states is a document called a personal property memorandum. This document lists your specific personal property and names who will receive each item. Usually, to make a personal property memorandum valid, all you have to do is sign and date it—witnesses aren't required. The document is then referenced in your will or trust as containing your wishes regarding your personal property. This approach allows you to specifically designate who will receive an item, but if you change your mind, you can simply create a new personal property memorandum instead of having to change your will or trust.
The Residuary Clause
Most, if not all, wills and trusts contain a clause that addresses any items that have not been specifically mentioned and distributed in the will or trust. This is referred to as a residuary clause. A will or trust may provide that anything left be “divided equally among my then living children” or “all to my spouse.” However, you can also decide to direct distribution to other individuals or entities. This ensures that your personal property is distributed. However, if the items are to be divided among a group of people and you do not provide instructions for how the items are to be divided, someone will need to decide how to do so, which could cause turmoil.
We Can Help
Once you know what you have, how much it is worth, and who you want to leave it to, you need to make sure that your wishes are reflected in an estate plan that is complete and legally enforceable. By working with an experienced estate planning attorney, we can craft a plan that is unique to you and your situation. Contact us a call to schedule your appointment, and let Pavone Law Group handle your estate planning.