Tips for Divvying Up Personal Property

We collect stuff throughout our lives. This “stuff” is known as our personal property. Some items are valuable, like jewelry, baseball cards, and works of art. Other items are sentimental, like grandma’s tea set, old Christmas ornaments, and photographs. Regardless of the value, it is important that these items be distributed the way you want when you die. Consider the following to ensure that your wishes for your personal property are honored

Ways to Divvy Up Your Items

If there is a specific item that you want a loved one to have, the easiest way to make an official record is to create a personal property memorandum. This document, which typically must be referenced in your existing will or trust to be effective, allows you to designate who will receive the specific personal property. For instance, you can leave your gold pocket watch to your nephew, Bill Smith. When creating and updating this document, it is important that state law formalities are followed to ensure the document’s validity. Also, make sure that the items you list are described with enough clarity and specificity that your personal representative or trustee will be able to easily identify them. Lastly, you want to make sure that the recipient is specifically named. It is best to refer to a specific person by the person’s given name, denoting if the person is a junior or senior, instead of just as “my granddaughter” or “my son.” Because this is a separate document, you have the flexibility to change the contents without changing your entire will or trust. However, as previously mentioned, any changes made to this document must be done in accordance with your state’s laws.

If you want to divide the entirety of your personal property equally among a group of beneficiaries, you can allocate an equal amount of play money to each beneficiary and hold an auction using this fake money where each beneficiary can bid on the items. This distribution scheme allows for each beneficiary to participate in the auction at an equal level, with the value of each item being determined by how much each beneficiary wants the particular item rather than by how wealthy each beneficiary is in real life, relative to the others.

Another option would be to gather all of the personal property in one location and allow each beneficiary to take turns picking an item. To encourage fairness, you could have the beneficiaries draw numbers to determine the order that they will pick. Once the numbers are drawn, the beneficiary who selected number one would choose an item first, then the beneficiary who selected number two would choose an item second, and so on. Then, when the beneficiary with the highest number has chosen an item, that same beneficiary would choose again, thereby beginning the next round with the items being chosen in reverse order, and continuing in that manner until all items have been chosen. This method works well if you have a collection of items to be divided or if most of the items are of similar value. Using this method allows each beneficiary to receive an equal number of items but may not guarantee that each beneficiary receives an equal amount of value.

Note: When distributing a collection, consider whether you want the collection to be divided among multiple people or given entirely to one person. Some collections may be more valuable if all of the pieces are owned by the same person, especially if the collection is complete.

Additional Considerations

Provide guidelines if someone else has discretion.

Depending upon the types of personal property you own and your beneficiaries’ needs and wants, you may be tempted to have your personal representative or trustee distribute items as the personal representative or trustee “sees fit” or “equally.” Be cautious as to how much discretion you give. Any time you give someone else discretion to make decisions on your behalf, you should provide guidelines for the individual to use when making decisions. This can help alleviate tension and fighting among the beneficiaries and between the beneficiaries and the personal representative or trustee.

Get your loved ones involved in the planning.

If you are unsure of how to distribute your personal property, ask your loved ones if there are any specific items they would like. One common approach is to give everyone sticky notes or stickers with their names on them and let them go through the home and place the notes or stickers on the items they would like. If multiple people want the same item, you can resolve the conflict and come up with a solution ahead of time instead of leaving it to someone else to resolve upon your death. If there are items that no one wants, you can consider other people that you had not thought of that might like the items. Additionally, if you know a person would like a particular item, you may consider gifting it during your lifetime so that you can witness the joy that it brings the person while you are still alive. Getting your loved ones involved will help ensure that your memory will live on through the items your loved ones receive.

Do not overlook the minor children.

Younger loved ones may also appreciate something of yours after you have passed. Depending on the nature of the item, a parent, guardian, or other adults may have to keep or manage it for the minor until the child reaches the age of majority.

We Are Here for You

Do not wait until you are gone to determine who will receive your personal property. Without your clear instructions, loved ones will be left to determine what you would have wanted. This can lead to disagreements, broken relationships, and possible litigation. We are here to help you establish and properly document a strategy to clearly communicate your wishes. We are available for in-person and virtual meetings, whichever you prefer.

What a Personal Property Memorandum Can Do for Your Will or Trust

Avoid family feuds over heirlooms. Family members often end up arguing over mom or dad’s favorite items when that parent dies. Arguments can take place over things like a coffee mug, a piece of jewelry or a painting. These types of arguments can be eliminated by filling out a personal property memorandum and keeping it with your will or trust.

A personal property memorandum is designed to cover who should receive items owned that don’t have an official title record. Personal property includes furniture, jewelry, art, and other collections, as well as household items like china and silverware. Personal property memoranda may not include real estate or business interests, money and bank accounts, stocks or bonds, copyrights, and IOUs.

When writing your memorandum, it is best to keep things simple. Personal property memoranda generally resemble a list of items with the attached names of the inheritors. It can be handwritten or typed but should always be signed and dated.

All items should contain sufficient detail so that argument and confusion can be avoided. Complete contact information including address, phone, email, and a backup contact if possible should be included. Do not include items that you have already explicitly left in your will or trust.

The beauty of a separate list of personal items and their planned distribution is that if you later decide to change who receives what, you simply update your current list, or replace the list altogether. You can destroy an old record or maintain signature and dates on each of your personal property memoranda so that it is easy to identify your most current set of wishes.

A personal property memorandum for your tangible personal effects is a simple way to address how you want your personal property to be distributed. We would be happy to help you create a legal personal property memorandum along with any other estate planning documents you may need. Please do not hesitate to contact our office by calling us at (405) 241-5994.

 

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