It is not unusual for family members to fight over personal property items of value (sentimental or financial – such as jewelry, guns, art, tools, furniture, silverware and china, etc.). After famous comedian Robin Williams died, his Will left his homestead to his wife, but there was a lack of clarity as to who was to receive personal property items inside the home which lead to a contentious battle between his surviving spouse and his kids of a prior marriage. They even fought over a wedding dress. As a result, communication and clarity are paramount in reducing risk of a family feud after you pass. Furthermore, the executor of your Will or trustee of your Trust should try to promptly secure your personal property so that the items are not taken.
The following options can be done to reduce risk of a family disagreement:
- Make a specific bequest. Your Will or Trust can state who you desire to get a particular personal property item. You should also always consider what happens if you no longer own such item (does the beneficiary get something of equal value or does the bequest lapse?) or if the beneficiary predeceases you (does it go to an alternate beneficiary or does the bequest lapse?).
- Prepare a written memorandum. If you have a large list of personal property items that you want to give away, many chose to do a memorandum instead, even though it is not legally binding as it is when bequested by Will. However, if it is listed in your Will, then every time you sell or give away or change your mind on who gets the bequest, you would have to do a new Will or codicil (adding to the cost of legal fees) and go through the formalities (you can’t just scratch out and initial) of signing before two disinterested witnesses and a notary. If you prepare a memorandum and communicate to your beneficiaries your desire, there is less likelihood of a feud and you do not need to go through the signing formalities and incur additional legal fees (although it is recommended you give a copy to your attorney).
- Require certain items be sold. If certain items are more expensive (i.e., artwork or certain jewelry) and you don’t want any particular beneficiary to receive, you might request your executor or trustee to sell and split the proceeds among the beneficiaries.
- Appraisal. If personal property has varying values, the executor or trustee should consider getting the personal property (i.e., stamp or coin collection, art, jewelry, etc.) appraised which could help in equalization if the Will or Trust requires that.
- Transfer assets during your lifetime. Sometimes you want to see your loved ones enjoy an item during your lifetime. If the item has been gifted by you, then it would not pass by your Will or Trust. If you have gifted an asset during your life but you wanted to continue to enjoy it, then you should communicate to other beneficiaries about the gift to reduce risk of a disagreement after your passing. If the value of the gift exceeds the annual gift tax exclusion (presently $15,000 in year 2020 and 2021), then the donor is responsible for filing a gift tax return (although there may be no tax due since you can give up to the amount to be given at death without taxation). Also be careful of giving away a highly appreciated asset as the donee (the recipient of the gift) would not get a step-up basis as they would have had they inherited the property.
- Lottery. Your Will or Trust could mention the beneficiaries can choose an item via a lottery system (pecking order determined by drawing cards or by taking names or numbers out of a hat). This can be done virtually as well. If someone chooses first, then they may choose last the next time around.
- Bidding. Trustee or executor gives tokens to beneficiaries and they could bid their tokens on what is most important to them. The problem with this is “gaming” as one beneficiary might bid up the price (like poker) to see another beneficiary use more of their tokens. Also, can the “loser” be reallocated the tokens bid?
Communication and clarifications reduce the risk of future family squabbling. Family feuds should be for television – not your family.