Have you taken the time to make an estate plan for what will happen to your personal effects and other items of tangible personal property - including your jewelry, collectibles, antiques, and art work, even your pets - after you die? While in many instances these things will have little monetary value, they will have a great deal of sentimental value to certain family members. And this, in turn, will lead to fights and may land your loved ones in court. This is why I encourage all of my clients to put together an estate plan for their "stuff." Here are the options for dealing with your personal effects and other tangible personal property:
Make a list and check it twiceTalk to your loved ones and ask them what personal items of yours that they would like after you die. While this may seem like a morbid process, it will really go a long way towards keeping peace and harmony in your family. Once you have asked everyone that you want to ask, make a list of who gets what and keep it with your estate planning documents. You can even mark certain individual items with the names of who you want to receive them. And be sure to update the list if you change your mind, lose or give away an item, or if someone you have named dies. And what should you do if two or more people want the same thing? Make the decision for them. Particularly if the list is in your own handwriting, who can argue about what you really wanted?
Set up a lottery systemWhile a list will go a long way, do not try to deal with everything you own by putting it a list - this will drive you and your estate planning attorney crazy. For things that do not make it on your list, set up a lottery system in your estate plan. In other words, have your loved ones draw numbers and then have them select the items that did not make it on your list based on the number that they chose in the lottery. Have them keep going until everything is gone or until they get down to items that no one really wants. Your estate plan should then provide that the unwanted items can either be sold and the proceeds divided among your beneficiaries or donated to charity.
Set up rotating picksInstead of a lottery system for items that did not make it on your list, set up a series of rotating picks in your estate plan. In other words, allow your oldest loved one to make the first selection and then go down in order of age with the selections, or vice versa. Another option is to start with the oldest and go down to the youngest, and then go in reverse order for the next round so that the youngest will have the first pick in the second round. Have your loved ones keep going until everything is gone or until they get down to items that no one really wants. Your estate plan should then provide that the unwanted items can either be sold and the proceeds divided among your beneficiaries or donated to charity.
Have a controlled free for allIf you want to keep it simple, then provide in your estate plan that your beneficiaries should divvy things up that did not make it on your list as they agree to divvy it up. And what will happen if they cannot agree on how to divvy up each and every item? Then select a tie breaker, such as your Personal Representative or Successor Trustee, to make the final decision about who gets what. Aside from this, give your Personal Representative or Successor Trustee the absolute power to sell the disputed items and divide the proceeds or donate the disputed items to charity.
Never, ever plan for your stuff to be divided equally!Here is a really good tip that comes from years of experience in dealing with family members fighting over their loved ones stuff: Never, ever make an estate plan that calls for your stuff to be divided equally among your beneficiaries! Why not? Because while your money and real estate are really easy to value and divide, your stuff is not. That is why it is so important to take the time to make an estate plan for your personal effects and other tangible personal property.