In the immortal words of the late comedian, George Carlin, much of our efforts and angst in life are centered around what to do with our “stuff”. While his classic routine was spot on, to avoid disputes concerning said stuff it is important to have a plan that clarifies your wishes to your heirs.
As most people are aware, bank accounts, investments, and most financial accounts are relatively easy to divide and pass on to your beneficiaries. Real estate can be sold, and the net sales proceeds split between your heirs, or your heirs can co-own the property.
Your personal belongings (i.e., your “tangible personal property” such as antiques and other collectibles, jewelry, dishes, silverware, artwork, furniture, tools, are more difficult to pass on). It is not uncommon for one or more children to state that a parent had promised them a particular item. Also, personal property will sometimes mysteriously disappear from the house shortly after (or even before) a parent’s death. For this reason, it is important for your executor or trustee to secure the property upon the death of a loved one. Regrettably, disputes over the treatment of personal property can create a rift between family members.
Here are some suggestions to avoid disputes:
Provide for the sale of specific items. It can be difficult to equalize shares between heirs and other beneficiaries if one or two items have much greater value than others. It will frequently make more sense to provide directions for your fiduciaries to sell the items of highest value and distribute the proceeds from the sale between your loved ones in equal shares.
List out important family heirlooms. Have a short list of the more important family heirlooms (or more valuable items) that you want to stay in the family. It is often easier for your heirs for you to specify who should get what specific item.
Gift during life. The more you distribute during life, the less stuff that your heirs will have to be dealt with upon your death. When you make gifts, make sure that everyone knows about it so that the person receiving the gift is not suspected of going rogue. Be aware that for highly appreciated property, for tax reasons, it may be better not to make gifts during life because they will lose the step-up in basis. So, check with your estate planning attorney or tax accountant first. Also be very careful about gifting if applying for Medicaid to cover nursing home expense is likely.
Get an appraisal. For the tax reasons referenced above and to guide you in deciding who should get what item, it can be useful to know the monetary value of the items you are giving away, whether it is during life or upon your death. This can also be very important for your executor or trustee in order to distribute the assets.
Use a drawing system. Instruct your executor to set up a system for distributing your personal assets. The executor can put names or numbers into a hat, and someone can draw them out to determine the order in which the family members or other heirs will choose items. To initiate the process, the executor should create a list of the most valuable items, including their appraisal value if one has been obtained. If everyone is in the same location at the same time, they can simply take turns picking the items they want. The next round the person who selected first will select last, etc.
The more you decide who gets what item rather than leaving the decisions to your family, the less likely the distribution process will create family strife.
If you’re interested in talking with the attorneys at Welts, White & Fontaine PC about estate planning, including wills and trusts, trust administration and probate matters please contact us by clicking here or by calling (603) 883-0797. Welts, White & Fontaine is one of Nashua’s largest, multi-practice law firms and serves the legal needs of both individuals and businesses in towns such as Amherst, Milford, Hudson, Brookline, Windham, Hollis, Merrimack, Litchfield, Bedford, Londonderry, Pelham, and, of course, Nashua.
Author: John Polgrean
This blog is intended for informational use only. The information contained herein should not be construed as offering legal advice or a legal opinion.