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Dividing Personal Possessions in Your Estate Plan
Who Get's Mom's Cookie Jar?
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When it comes to estate planning, families often focus on the transfer of financial assets, but it is more often personal possessions that become issues and block an amicable settling of an estate. It's not about monetary value, but sentimental value; such as, who gets Mom's Christmas cookie jar.
An appraiser that was called in to value the personal possessions of an estate recalled siblings that fought bitterly over a painting in their mother's home. The appraiser said, "This is not worth more than $20.00, and if you let me out of here, I'll pay the $20.00.”
Avoiding Family Disputes
First of all, try and assure that personal possessions will be under the control of a trustworthy individual; as sometimes things "disappear" from a trust/estate. Most people make verbal promises about items or leave the general instruction in a will or trust asking the executor or successor trustee to divide the items equally. This can put strain on the relationship of the executor or successor trustee and the other beneficiaries of which he/she may be included.
The best way to avoid a dispute that can cause irreparable damage to a family is to discuss the division of personal property with your heirs prior to designating who is to receive what. It may be that a special memento means more to one beneficiary than another. Also, most parents want to be fair, but some gifts may be of higher value than others, so maybe the person receiving the higher value possession receives less of the other assets. There are many ways to avoid disputes:
- Gift certain items during your lifetime.
- One can leave a list of who receives what. This list is legally binding in California if the will is written appropriately and the value of the personal items total less than $25,000 at the time of death (Other restrictions apply, seek the advice of an attorney.)
- Have a beneficiary auction after the items are appraised. The value of the items won are deducted from the bidder's inheritance.
- Draw straws as to who picks first, and then have everyone pick an item and so on, changing the order of who picks first for each consecutive round. Keep track of the value of the item by deducting the chosen item from the chooser's inheritance.
- Consider selling or donating fought over items.
If all else fails, hire a mediator.
How About My Family? How Do I Predict What My Family Will Do?
Not all families are prone to disputes over personal possessions. An executor can often smoothly disperse personal possessions. However, if your family has any of the following situations, you have a higher risk of dispute:
- Multiple marriages especially with step-children-step-parent relationships.
- Siblings with already apparent power struggles or a history of fighting.
- Dependent adult children.
- Co-Trustees that have a history of inability to work together.
- Lack of communication between beneficiaries.
- Family estate planning secrets that result in surprises after death.
A little planning and care taken during one’s life can prevent disputes and make sure the family remains a family.