Most of us have heard of a bad experience another family had dividing up personal property after a parent died. Arguments and bitter feelings ensued when the adult children tried to figure out who should get Mom’s favorite pie plate, Dad’s trusty set of wrenches, or the painting over the fireplace.
Neglecting to specify who-gets-what after you pass can lead to problems; and sometimes, even when you leave your property in equal shares to your children, conflict still arises. For example, when comedian Robin Williams died, he left his home to his wife. Unfortunately, his revocable trust was not clear as to who was to take possession of the personal property items inside the home. This led to a contentious legal battle between his surviving spouse and his kids from a prior marriage.
It does not have to be this way. Having worked with families through the Probate process for almost twenty years (unfortunately many times in Probate litigation), we have collected a few golden nuggets of wisdom to pass along to you, with the hope of reducing the risk of a family disagreement when you are gone.
Talk about your wishes.
The single biggest source of arguments is trying to figure out what a parent wanted done with their personal property when instructions were not expressed. Have a family meeting to discuss your wishes. Explain how you want you want your personal property distributed. If one child is receiving a larger share, make sure everyone knows it. If you feel uncomfortable with a family meeting, write a letter to each loved one explaining your wishes. When your children know your wishes, it goes a long way to avoiding litigation.
Make specific bequests in your Will or Trust.
If it is important a loved one get a special item of yours, memorialize it in your Will or Trust. Also consider what happens if you get rid of that item before you die. Does that child get something else of comparable value or does the bequest lapse and no one gets it? As difficult as it might be, consider what would happen if the intended beneficiary predeceases you. Does the bequest go to another child or does it lapse as well?
Prepare a personal property memorandum.
If you have a long list of personal property items that you want to give away, prepare a written memorandum. A memorandum is a document mentioned in your Will that lists your tangible personal property and the people you want to inherit those items. By referring to the memorandum in your Will, it makes your bequests legally binding on your Personal Representative to distribute. The major advantage of a property memorandum is that you can change it without having to write a new Will. Make sure you give a copy to your estate planning attorney.
Know how your assets are titled.
Improper titling of assets has led to many lawsuits. Pay particular attention in adding your child’s name to bank accounts or real estate. Horror stories abound where a child was added for convenience to a bank account to help in paying your bills, but that person was not intended to receive the full account proceeds upon your passing. Jointly held bank accounts and real estate pass by operation of law to the joint account holder even if your Will states otherwise. Make sure you do not make this mistake. (For more on this see: Should I Add my Adult Child to My Bank Account?)
Review beneficiary designations.
To avoid family disputes, make sure you review the beneficiary designation to your life insurance policy, retirement accounts, and financial accounts. We have seen many situations where a family took out life insurance policies naming their only child at the time. Changes were never made when future child arrived with unintended results once the person passed. (For more on this see: The Importance of Reviewing Your Beneficiary Designations )
Transfer assets during your lifetime.
Your assets are yours to do as you please. Often a parent wants to see their child enjoy an item during their lifetime. Keep in mind there may be gift tax implications (presently $15,000 in year 2020 and 2021) so make sure you discuss this with your tax advisor.
Require certain items to be sold.
If giving a high value item (i.e., cars, artwork, jewelry) to only one of your children may cause problems, you can direct your Personal Representative or Trustee to sell the high value item, and split the proceeds among your beneficiaries.
Specify a lottery system for your children to follow.
You can specify in your Will or Trust that the beneficiaries choose personal property items via a lottery system. This works best if there no large disparities in asset values.
You have spent a lifetime acquiring your assets and many items have special meaning to you and your loved ones. Leave the family feud to television; work with an experienced estate planning attorney to help you develop a plan to make sure your wishes are followed and lessen family disputes.
Founded by nurse attorney and with offices in Acton, Burlington, and Sudbury, Massachusetts, Generations Law Group helps families navigate the complex area of elder law to inform and protect loved ones in every generation.
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