All too often discord and conflict over the division of personal possessions follow the death of a loved one. Personal possessions are referred to in your estate planning documents as "tangible personal property." Tangible personal property includes your personal effects, artwork, furniture, jewelry, tools, collectibles, automobiles, and similar items. It does not include cash, investments, or real estate.
Why do disputes over tangibles occur?
Tangible personal property is often a source of dispute for a number of reasons. First, tangible personal property often cannot be easily divided into shares. While real estate can be owned by multiple parties and cash or investments can be divided, a piece of artwork or an heirloom is very difficult to divide among multiple people who may desire it.
Second, because tangible personal property often lacks a formal way to track ownership (such as a deed or an account at a bank), it is not unusual for a decedent's possessions to "disappear" as family members visit the decedent's home around the time of his or her death. This sows distrust and bitterness.
Third, tangible property is not usually among the most monetarily valuable assets that a person may own and so the disposition of tangible personal property may not be carefully addressed when he or she thinks of his or her estate plan.
Finally, it is not unusual for loved ones to attach sentimental value to tangible personal property. This means that if tangible personal property is left to be divided simply based on monetary value, there may be bitterness and conflict.
What can be done to avoid disputes over tangibles?
Fortunately, there are some strategies that you can apply to help avoid future conflict. First and foremost, you should clearly state your wishes regarding the disposition of your tangible personal property in your will or your trust. You may consider including a memorandum to supplement or accompany your will that provides further details on how each item should be disposed of upon your death. Using a memorandum is helpful because it allows you the chance to express and update your wishes without the more rigid formalities of executing a will.
For those items that you have not set aside for a specific person, there are some solutions that you may consider to reduce the chances of conflict.
You may provide for a fair method that will allow your heirs to choose what items they would like to receive. For example, you may require that your heirs draw lots and take turns choosing items. The order of who chooses first could change each "round."
If the circumstances allow, you also may consider giving some items to your loved ones before you pass away in order to avoid conflict. If you decide to do this, do not forget to update any written memorandum regarding tangible personal property so that there is no confusion.
If none of these methods are appropriate, you may consider directing your executor to sell all your tangible personal property and distribute the sale proceeds rather than the actual items themselves. While this may forestall conflict between family members, it also may disappoint some who would rather have received a certain item to which they had a sentimental attachment rather than the monetary sum from its sale. Open communication with your heirs can help set their expectations and inform your decisions.
Clearly expressing your wishes in writing, communicating with your family members, and providing for specific methods to resolve conflicts can go a long way toward making the division of your tangible personal property a smoother process.