One of the most overwhelming parts of creating and probating a last will and testament is the distribution of personal property.
Personal property is a unique category of assets. Even in the simplest after-death distribution, personal property can become a hindrance to final distribution. There are a couple of reasons why.
First, the nature of personal property makes it both economically worthless and emotionally invaluable. Many personal property items hold only sentimental value, but that value in itself can pit family members against one another, potentially accruing actual costs and slowing the whole legal process.
Second, the distribution of personal property often is wrapped up with the residuary estate. Without specific provisions for who will receive personal property and in what manner, beneficiaries may find they are forced to bid against strangers in an estate sale rather than simply choosing particular items of sentimental value.
Personal property distributions should include clear language in the last will and testament for distributions of those items. Before making instructions for general distribution, the individual testator – the person executing the will – first should outline specific items he or she wants to go to specific people. Items promised to someone should be listed and removed from the general pool of personal property.
Next, the testator should specify who is to be included in the distribution of remaining personal property. While many testators have the same recipients of personal property as the full estate, this is not always the case. Especially for those without children and those giving to charity, the testator may desire to limit beneficiaries of personal items to close family members.
Third, clarify the method of distribution of the remaining items. Beneficiaries simply may take turns, the executor can employ a lottery system or the property may be generally appraised with values being divided equally.
Whatever the choice, it should be determined by the testator, as he or she presumably knows his or her beneficiaries the best.
Finally, include any last instructions for unclaimed items. This is a good opportunity to include instructions for charitable donations of items such as furniture, kitchen tools and clothing. Whatever is not distributed to beneficiaries and is not donated to charity likely will be included in an estate sale with the proceeds distributed between beneficiaries of the full estate.
One way to avoid complications between beneficiaries after death is to give personal property away during your lifetime. Especially for those with limited incomes, sentimental personal items make excellent gifts for Christmas and birthdays and provide a clear removal from the overall estate.
Giving personal property as lifetime gifts also allows the giver to offer explanation of why the gift was chosen for the individual, helping the recipient to understand the intent of the gift.
On the other hand, there are two common scenarios that generally should be avoided: the testator uses a “sticky note” system of identifying personal property distributions; and the testator leaves everything to one person with the expectation the single beneficiary will distribute according to the testator’s wishes.
The “sticky note” system has a myriad of problems primarily stemming from the unenforceability of using a mere note and the ability of unscrupulous individuals to relocate or remove notes.
Similarly, leaving one individual to divide personal property may avoid court action, but is unlikely to result in a fair distribution of property as there is no legally enforceable right to intended beneficiaries.
Personal property presents its own challenges and should be considered apart from general distributions. As in any estate plan, understand your own wishes, then ensure those wishes are reflected in your documents.