When planning your estate, people often focus on major assets like retirement accounts, bank accounts, life insurance, real estate, and other valuable items. However, personal possessions also hold significant value and need to be addressed. As you begin or continue your estate planning journey, consider these questions about your personal property.
Assessing the Value of Your Items
Monetary vs. Sentimental Value
Value is subjective and can vary greatly between individuals. Some items, like an antique clock, might have significant monetary worth, while others, like your grandmother’s class ring, carry sentimental value. Each type of value requires a distinct strategy in your estate plan.
- Monetary Value. Determine the actual worth of valuable items, as they may need to be insured. Standard renter’s or homeowner’s insurance policies might not fully cover or reimburse for damage or theft. Additionally, ensure the recipient is aware of any necessary maintenance to preserve the item’s value.
- Sentimental Value. Sentimental items can often lead to family disputes. To prevent conflict, clearly document your wishes regarding these mementos. Consider carefully who should receive sentimental items and find ways to mitigate potential disagreements if multiple people want the same item.
Planning for Your Personal Property
Will Someone Want Your Stuff?
Before finalizing your estate plan, talk to your beneficiaries to see if they actually want the items you plan to leave them, especially if those items require storage or maintenance.
If More Than One Person Wants an Item
Anticipate potential conflicts over items multiple people might want. Address this in your estate plan to prevent disputes. Balance inheritances by either specifying who gets valuable items or dividing similar items among multiple beneficiaries. Clear communication with your loved ones can help avoid future conflicts.
If No One Wants an Item
Sometimes, items important to you may not hold the same value for your loved ones. Plan for these scenarios by deciding whether such items should be sold, donated, or given to someone with a shared appreciation for them.
Including Personal Property in Your Estate Plan
Specific Gifts in a Will or Trust
You can specify who will receive particular items in a last will and testament or a revocable living trust. For example, you might state, “I leave my yellow antique plates with blue flowers to my daughter, Joan Williams.” If you change your mind, you will need to update the will or trust formally.
Personal Property Memorandum
In many states, you can use a personal property memorandum to list specific items and their intended recipients. This document is referenced in your will or trust and is easier to update without needing formal witnesses.
The Residuary Clause
Wills and trusts typically include a residuary clause for items not specifically mentioned. This clause might direct that remaining items be “divided equally among my then living children” or “all to my spouse,” or distribute them to other individuals or entities. If items are to be divided among multiple people, a lack of clear instructions can lead to disputes.
We Can Help
To ensure your estate plan accurately reflects your wishes and is legally enforceable, work with an experienced estate planning attorney. Contact us to schedule an appointment and craft a plan tailored to your unique situation.
