Compared to real estate, bank and brokerage accounts, and insurance policies, family heirlooms do not generally take pride of place in the estate planning conversation. Tangible personal property (things like jewelry, furniture, art, clothing, pets, and household items) is often overlooked during the estate planning process. However, the transfer of “stuff” from the deceased to his or her loved ones can cause the most conflict because the value of the property is often more sentimental than financial.
Determine What Your Heirs Want to Keep
When you pass, you will leave behind a legacy of memories, wisdom, shared experiences, any wealth you have accumulated, and your possessions. These possessions may make you think of a particular person or remind you of a special memory. For your loved ones, these items may hold sentimental meaning as well. As you work through your estate planning process, you can begin keeping a list of special items and who you may want to receive them. This is also important to do for those items that have financial value. It is a good idea to begin talking with your loved ones about any particular items that they may want to keep after you pass.
Keep a List and Update it Regularly
In many states, this list of items along with names of heirs functions as a kind of addendum to a will. In the state of Florida, you can do this by simply including a provision in your will that refers to your Tangible Personal Property List. You can then create a list and amend it as you wish. All that is required for this list to be valid is that it must be signed and dated by you, the grantor. If multiple conflicting versions of this list exist, the probate court will honor the one that is dated last in time.
Provide for Tangible Personal Property in Your Will
For any possessions that are of particular importance or value, you may decide to incorporate certain tangible personal property into your will. Although it is not practical to list every one of your possessions and the preferred recipient, it may make sense to list particular items that may be contentious.
You should also ensure that there is clear catch-all language regarding the distribution of personal property in your will. You can specify, for example, that all personal possessions in your home should pass to your spouse with the exception of a particular painting that you want to go to your daughter. Any provisions of this kind should be as specific and clear as possible. It is best to provide a description of the item and even include a photograph if possible.
If your will states that your tangible personal property is to be divided between more than one heir, it is helpful to provide some guidelines to make sure that this process is as equitable as possible. Many people will state that personal property should pass first to the surviving spouse and then be shared amongst the children. A court will typically require that this distribution be financially equitable. If there is a conflict, the court may order the sale of disputed items and distribution of the proceeds according to the will or the state intestacy laws (if there is no valid will). To avoid this kind of intervention and any painful conflict between your loved ones, you can provide guidelines for how property is split:
Agreement of the Heirs. This is the most common method of distribution. The heirs will simply agree to divide personal property based on value, both sentimental and financial. For items of value, you may provide that executor should have items appraised before distribution. If you specify the “agreement” method, it is advised to include a backup distribution method in the case of disagreement.
Sell Property and Split Proceeds. This is the method the courts will enforce if a dispute cannot be resolved. The executor of the estate will sell the property and divide the proceeds. A challenge with this method is that the sale will likely be rushed, and the estate may not sell the property for as much as it is worth.
Lottery. You can provide specifically for how such a lottery should go, but commonly family members will draw numbers and then take turns picking items to keep. This may lead to unequal distribution, so you may want to include a provision that ensures each heir receives substantially equally-valued property.
A commonly-overlooked part of tangible personal property is family pets. Although they may be treated as members of the family, under the law, pets are considered personal property. You will need to choose an heir who will be able to care for your pets and make this clear in your will.
Consider Using a Trust to Transfer Tangible Personal Property
Tangible personal property can be transferred to a trust. If you are considering setting up a trust to provide for your loved ones, talk to your attorney about including tangible personal property in the trust as well. This is particularly useful for heirlooms that have high value, for example, works of art. This is also a good method if the trust is designed to provide for a loved one’s long-term care, like a special needs trust for a disabled family member.
We Are Here to Help
The best way to avoid future conflict is to be as open as possible. Begin the conversation with your loved ones, and consult with an experienced attorney who has been through this before. An attorney can help you draft language in your will and in your letter of instruction that is clear, specific, and will not lead to confusion. Each time you update your will or your tangible property list, provide the latest copy to your attorney. He or she can review it for any red flags and will be able to provide the most recent version when the time comes. At The Legacy Law Firm, PLLC, our experienced Florida estate planning attorney is here to help! Give us a call at (954) 999-9683.