Heirloom or Not - It's All in the Eye of the Beholder

By Ronald A. Fatoullah, Esq. and Yan Lian Kuang-Maoga, Esq.

{4:27 minutes to read} For the most part, handling the estate of a decedent is a tough but manageable undertaking - that is until one gets into the distribution of tangible personal property. What may be of no value to an outsider could be invaluable to a loved one. Unfortunately, planning for the distribution of tangible personal property is often overlooked. It is critical to thoroughly discuss and plan for the distribution of what are often family heirlooms.

The tangible personal property of a decedent generally refers to jewelry, clothing, automobiles, books, furniture and other tangible personal items. However, it all depends on how the term is defined in the decedent's will or trust. To list all of one's personal property in the will or trust is usually impractical. So, here are a few ways that personal property can be distributed:

1. Specifically Bequeathed: While it is impractical to list all personal property and who is to receive it, sometimes it does make sense to specifically refer to certain specific items in a will or trust. A specifically bequeathed item under a will or trust is ensured to pass onto the beneficiary. For example, a mother may specifically provide in her will that her daughter is to receive her engagement ring.

1. General Distribution with or without a Specific Selection Process: When there is no particular need to specify who is to get which items, all personal property can be distributed per a general personal property clause. This clause usually provides that all tangible personal property is to be distributed in substantially equal shares. This will require the beneficiaries to agree on who should get what. This method of distribution is usually a good idea for estates with beneficiaries who get along with one another. When there is potential for conflict among beneficiaries, a specific selection process can be provided. For example, the will can specify that the selection process is to be done by drawing lots or picking names out of a hat.

2. Memorandum of Intent: When there is a long list of items that one intends to bequeath to particular beneficiaries, a memorandum may be written to designate each individual. This memorandum should be signed, dated and kept with the original will or trust. Generally, this memorandum is referred to in a will or trust, and the executor or trustee is directed to search for the memorandum and follow its instructions. Please be advised that in New York, a memorandum is not legally enforceable unless it is included in a will. However, in practice, memoranda are generally accepted by beneficiaries.

3. Bequest to the Executor: If the named executor or trustee is respected by the beneficiaries, tangible personal property can be distributed at his or her discretion, with use of the following:

a. The will or trust will give all such property to the executor, and will direct him or her to distribute the property based on a memorandum left by the decedent. This scenario is different from the previous one in that all property is given directly to the executor, and, therefore, belongs to the executor. The testator or grantor would have to trust the executor to respect his or her wishes as articulated in the memorandum.

b. The will or trust will provide that all property is to be distributed in substantially equal shares, to be determined by the executor at his or her absolute discretion. The executor's decision will be final and binding on all beneficiaries.

When it comes to the distribution of the tangible personal property of a decedent, there are a number of ways to prevent or minimize hurt feelings in determining which beneficiaries inherit specific personal mementos or family heirlooms. It is important, therefore, to consider how one wants these items distributed and to plan accordingly.

Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Yan Lian Kuang-Maoga is an elder law attorney with the firm. The law firm can be reached at 718-261-1700, 516-466-4422, or toll-free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also the co-founder of JR Wealth Advisors, LLC. The wealth management firm can be reached at 516-466-3300 or 800-353-3775.