Some people leave their affairs in nice, neat packages: They consult financial and legal experts, do estate planning, and execute well-drafted Living Trusts. They fund their Trusts, placing title to their assets in the proper form to avoid probate and possibly Federal estate taxes.
Nevertheless, they sometimes leave behind ambiguities and hurt feelings, over the distribution of seemingly small items of personal property. Items that have potentially great sentimental value to one or more beneficiaries. For example, typically people have only one family Bible, although they may have several children.
Then there are items which one beneficiary says were promised or given to him/her by the decedent, although nothing in writing proves such a gift.
What should the prospective decedent to do, to prevent such hassles, which can sometimes wreck family relations?
No one solution is ideal or even practical in every case, but the following suggestions may be useful in some situations. They include:
1. Give the item to the beneficiary during your lifetime, accompanied by a cover letter confirming the gift.
2. Tell other family members that you have made the gift, especially if there’s likely to be a question raised later.
3. Draft a Memorandum for Distribution of Personal Property as a part of your Living Trust. In this document, describe items and name the beneficiary of each.
4. Authorize your Trustee to make distributions after your death, either by rotation among a class of beneficiaries (such as “my then living issue”) or (especially if the Trustee is not a beneficiary) at the Trustee’s sole discretion.
5. The Trustee might be authorized to hold a mini-auction between those beneficiaries who want one item.
6. Use technology to duplicate items such as photographs and sound recordings. The cost of such duplication is typically far less than the cost of arguments.
7. Include a Trust provision that you have neither made nor promised to make any gift of property, unless possession and/or title of such item has been transferred to the recipient during your lifetime (or not later than several months before your death.)
Should you discuss your dispositive plans with your beneficiaries? It all depends. Sometimes such discussions clarify your intentions. Sometimes, however, you end up getting hassled by those who feel left out or disappointed. Estate planning is an act of kindness. Don’t put yourself in a position of being harangued by those very people you love the most.
Jerry Kessler practices law in Santa Clarita. He may be reached at 661-255-1001.