For a variety of reasons, many individuals − even those who have created thoughtful estate plans − fail to create plans for the distribution of their personal property following death. Personal property (also called tangible personal property or TPP) refers to all items other than cash, cash equivalents and real estate, including furniture and household items, computers and electronic devices, photo albums, jewelry, firearms, artwork, collections, vehicles and so forth.
Many people address these items in their estate planning with broad statements such as, “divide my tangible personal property equally among my children.” In using such a statement, these people likely imagine their children calmly taking turns picking out items that have great sentimental value to them and then working together in harmony to determine which of the remaining items should be donated, sold or given to other family members.
Unfortunately, the scenario often plays out much differently. If you have more than one heir, a vague direction like this could lead to arguments about who receives an item that multiple people want, about whether “equally” refers to quantity of items or value, or about an item you allegedly told someone they would receive but did not put in writing.
Keep in mind that your family members will be grieving at this time, and this may cause them to feel especially attached to items that belonged to you during your life, even if those items have little or no monetary value (like your guitar pick collection). Arguments over those items can damage family relationships, possibly irreparably, and in some cases even lead to lawsuits.
You can help avoid this conflict with a little extra thought and preparation.
Tips when planning for your personal property:
- Do create a list of specific items you would like to be distributed to particular individuals.
- Michigan law provides that an estate plan document may refer to a separate list distributing items of personal property, and so long as that list is either handwritten or signed, it will be legally enforceable.
- The list may be created before, after or at the same time the estate plan is drafted. You can revise the list at any time, but if multiple lists are created, it is important to date them so that it is clear which list controls.
- The list should be kept with your estate plan documents so that it is easy to locate following your death.
- Don’t use name stickers to mark items for family members.
- While this seems like an easy way to allocate household items, it’s impractical for many items (for example, dishes used on a regular basis), and risky for the rest. Stickers can fall off over the years, and family members could accidentally (or purposely) rearrange them, leaving a mess to sort out later.
- In addition, having death-allocation stickers on items while you are still living can be unsettling for both you and your family.
- Do provide a method for family members to select items of personal property that were not allocated to specific individuals.
- It is likely that family members will want some items of personal property in addition to those that you allocated using your personal property list. Your estate plan documents can allow them to select the items they desire to have.
- In order to reduce arguments, a selection method should be specified. Will certain family members have priority? Will they select items in rotation? Will the personal representative of your estate decide who receives which items?
- You should also specify what is considered an “item.” For example, may someone select an entire set of china for her item, or may she select only a single dish? Specifying this should help reduce arguments and answer questions that would normally arise, especially with items like the guitar pick collection. The family will understand whether you intended them to break up the collection and allow each person to select a guitar pick or whether the collection should be kept together for a single person.
- Do have a written plan for what should happen to the personal property that family members do not wish to keep.
- Inevitably, a large portion of your personal property will be unwanted by your family members. If you have a preference as to whether those items are sold or donated, you should include a corresponding direction in your estate plan documents.
- If there is a particular charity you’d like to support and that you think would benefit from a donation of certain items of your personal property, include a donation instruction in your estate plan documents.
- Don’t expect your children to behave better after your death than they did when you were alive.
- If they argued over things while you were alive, you can assume that they will continue to argue after you are gone.
Knowing how difficult the months after your passing will be for your family, it makes sense to ease their burden and provide them with some guidance as to what you would like them to do with the items that are not accounted for elsewhere in your estate planning. If you would like to discuss planning for your personal property, contact your Warner attorney or contact Beth O’Laughlin at bolaughlin@wnj.com or at 616.396.3118.
