Personal property items, such as jewelry, furniture, tools, or railroad cars, are often overlooked in the estate planning context. People tend to focus on real estate and financial assets, but the truth is that personal items may have the most sentimental value to heirs. This could be an item like a necklace that has been passed down over generations or a rocking chair with memories of grandpa in it. If there is no indication from the previous owner as to who will inherit these items, children or other heirs may have conflicting views as to who has first claim to them. So let’s look at a few estate planning methods to name beneficiaries for personal property.
A revocable living trust is a document that is used to pass assets on to future generations smoothly and with no probate court involvement. The trust includes provisions stating who will take over managing trust assets when the trustors die and how the assets will be distributed. The living trusts that we do at Lantz Law include an article where the trustor or trustors can make “specific distributions” of property. For example, the trustor (the person establishing the trust) could add language stating that “upon my death, my daughter Priscilla shall receive my diamond necklace”, thereby preventing any claims to the necklace by any other children. Of course, if there’s more than one diamond necklace, the description should be more specific. An assignment of property should also be executed along with the trust so that the personal property is “assigned” to the trust. Without specific instructions in the trust, the trustee will still have authority to distribute personal property but may have to deal with fighting heirs.
If a living trust is not an option, then one can distribute personal property by the terms of a will and a “separate writing”. Massachusetts has a statute (M.G.L. c. 190B § 2-513) stating that a will “may refer to a written statement or list to dispose of items of tangible personal property not otherwise specifically disposed of by the will….” The will should refer to the separate writing and should also specify a period of time, sixty days, for example, by which the personal representative must find the separate writing. The separate writing should be signed by the testator/rix (the person signing the will) and should specify the items and devisees with “reasonable certainty”. The writing may be changed over time after the execution of the will so that if the testator/rix changes his or her mind about who will receive a certain item, an entirely new will is not needed.
Finally, one other very simple method of distributing personal property is to give it away while living. We have many clients who have done this rather than leave it by the terms of a will or a trust. There are benefits to this approach. For one thing, it’s less likely heirs will fight over personal items when the items have already been given to one individual or another. Another benefit is that the donor can see the donee enjoying the gift and the donee can thank the donor while they’re still alive. Finally, this may provide some peace of mind in knowing that the item is going to the right person.
As you can see, even the distribution of personal property can be complicated. Proper advice and properly drafted documents can make things much simpler for loved ones.
Please feel free to contact Lantz Law if you’d like more information or would like to schedule a consultation.