One of the main reasons many people decide to get their estate planning done is to help promote family harmony and ensure that their assets are passed down to their loved ones. If your loved ones already get along well, the goal is to maintain such a harmonious relationship after you’re gone. Likewise, if your loved ones do not get along with one another, the goal for your estate plan may be to help avoid any unnecessary friction and conflict.
For certain assets, how you may go about dividing them may be simple, such as anything with a monetary value that can be immediately liquidated. This can be bank accounts, IRA and retirement accounts, life insurance policies, and any investments. However, for other assets, this may not be as simple. In fact, it might be impossible. How would you divide a coveted family heirloom necklace or ring amongst several child beneficiaries? What about all of the tools and that beloved coin collection? How about that valuable piece of art that you got from your great Uncle Gary?
These kinds of assets are what are known as tangible personal property. Unlike real property, like your home, tangible assets are physical objects that don’t have an official, titled owner. These can be things such as keepsakes, collectibles, jewelry, artwork, and decorations. They may or may not have significant monetary value, but they can often have a strong sentimental attachment to them by you and your loved ones.
Tangible personal property can often be overlooked by people. As a result, there have been many circumstances where when someone passes away, the family becomes torn apart and Word War III breaks out over these kinds of assets. (Trust us, we’ve seen it happen far too many times than we can count!)
Here are a few tips that can help you pass along tangible assets to your loved ones and keep the peace (or at least reduce some of the potential fallout) after you’re gone.
TIP #1: Give Away Your Tangible Assets Away While You’re Alive
This is probably one of the easiest ways to distribute your tangible personal property and that is to give it away to those individuals you want to have them once you’re gone while you’re still alive. There can be many benefits to doing this. First, you can help ensure that items you’re giving away are going to someone that really wants it. You can also help directly explain and dissolve any potential conflicts among beneficiaries. Another benefit of doing this is that you will effectively declutter and downsize your amount of belongings, which will certainly make things easier to administer and organize after you pass away.
TIP #2: Be Specific in Your Estate Plan
Another way that you can distribute your tangible personal property is through your estate plan, such as in your Will or Living Trust. The important part of this process is to be as specific as you possibly can about what kinds of tangible personal property you have and who you want it to go to. This will help ensure that your belongings go to the intended individual and does not leave anything up for someone else to decide (or your beneficiaries to fight over). In all of our Living Trust plans, we have a Personal Directions section and also a Location List for our clients to fill out in their Living Trust Owner’s Manual where they can be very specific about what tangible personal property they have and who they want it to go to. The beauty of these items in the Owner’s Manual is that they’re completed by the client and can be easily modified whenever necessary without having to amend the Living Trust when there are changes. The Living Trust is intended to help pass along other real property, such as real estate, bank accounts, stocks, and other assets that are titled into the name of the Living Trust.
The important part is to be as specific as possible when describing and listing out your tangible personal property. The more generic you are about things, the more loosely they can be interpreted, which may ultimately impact who they end up going to.
In conclusion, passing along your any of your assets to your loved ones should involve taking the time to think about what you want and then making a plan for how best to appropriately ensure those items end up getting to the right person. This is where consulting an estate planning attorney is highly recommended. An attorney will not only help put together your estate plan, but be able to provide you the proper guidance and counseling about how best to ensure that your assets are properly distributed after you pass away.
If you would like to learn more about this and how we can help you and your family, just like we’ve helped thousands of people for close to 40 years, attend one of our upcoming virtual seminars or download one of our free guides or reports.