A number of years ago, my client and I were discussing her wishes for the distribution of her tangible personal property items, such as clothes, jewelry, painting, silver collections, and the like. She told me that she planned to give most of these items away while she was alive because “a warm gift is better than a cold one!” This phrase resonated with me and is one that I often now use with my clients who wish to ensure that certain family members receive family heirlooms or specific personal property items. The sentiment is not only warm but logical as well.
To be clear, I am in no way recommending that you give away all items of tangible personal property now, especially those you use, enjoy, or plan to use in the future. However, if there are family valuables or objects you already know you want certain people to have, such as grandparents’ jewelry, fine china, furniture, or even paintings, I recommend gifting these items during your lifetime.
Why is this a good idea? Here are a few reasons:
- You will get to experience the enjoyment of giving the item to the receiver personally.
Usually, a Last Will and Testament or Trust document will outline who should receive items of tangible personal property after your death. This document might leave everything to one person or to a class of people, or it might earmark certain items to be given to specific individuals, called “specific bequests.” The individual who is responsible for distributing these items after your death is the Executor named in the Last Will and Testament or the Trustee named in the Trust. Instead of leaving this task to your Executor or Trustee, personally gifting a family heirloom during your life may be much more meaningful for both you and the receiver of the item. This not only reduces the property that requires sorting and distributing after you pass away, but it also allows you to witness the joy the gift brings to your loved one’s face firsthand. - Giving gifts of tangible personal property during life can avoid conflicts among family members after death.
Frequently family members will argue over who should receive family heirlooms, especially when all items are left equally to multiple children. How do the kids decide who receives Nana’s beloved Christmas ornament collection or Poppy’s precious salt-and-pepper shakers? Splitting the contents of the family china cabinet among three people where no one receives a full set of plates doesn’t make much sense either!
I once had a client who was the Trustee of his mother’s trust, which left all tangible personal property equally to him and his sister. He and his sister disagreed as to who should receive virtually every item of their mother’s tangible personal property, and thousands of dollars in legal fees were spent negotiating who would receive these items, some of which could not have cost more than a dollar! While I understand that sentimental value is worth much more than any dollar amount, clear instruction and communication as to who should have received specific items of tangible property upon the mother’s death or the mother giving certain items to the recipient during life could have avoided these conflicts and costs! - Gifting during life avoids the potential expense of valuing and safeguarding the items of tangible personal property after your death.
Depending on the items to be distributed, they might need to be safeguarded, mailed to the intended recipients, or kept in storage facilities until they can be distributed to the beneficiaries. These expenses usually will be paid by your estate, thereby reducing the residuary amount to be distributed to the beneficiaries. Furthermore, depending on the language in your estate planning documents, the expenses associated with storage and/or mailing of the items to the recipient can wind up being an expense the recipient needs to pay personally as well. - Communication is easier during life!
Many clients do not wish to share information contained in their estate planning documents while they are alive. They are considered private documents. That said, failing to communicate with the beneficiaries of your assets during your lifetime may allow them to have preconceived notions of what they will be receiving upon your death. For example, if you have always told your granddaughter that she can have your diamond engagement ring after you pass away, it would be imperative to let her know that you actually gave it to your grandson who was about to propose to his soon-to-be wife. While this may be a difficult conversation to have with your granddaughter, you will have the opportunity to explain your reasoning to her personally and to give her another item of sentimental value instead. It would be very hard (well, actually impossible) to rationalize this to your granddaughter after your death, and when she learns from someone else that the ring is no longer hers, she may direct her anger at your grandson (or her new sister-in-law)!
What about items you are not ready to part with or still use? For these items, ensuring you have your estate planning documents in order and that those documents clearly indicate who is to receive any specific items of tangible personal property is crucial. I recommend that tangible personal property clauses in a Last Will and Testament or Trust be kept fairly simple, as it can become complicated and costly to list every item of property you own and who is to receive each one. For items that do not need to be expressly referenced in the Last Will and Testament or Trust, you may want to create an ancillary list of your tangible personal property and indicate which individual is to receive which item. While these ancillary lists are not legally binding, they will provide guidance to your Executor or Trustee, and they certainly help demonstrate your wishes.
As always with estate planning, communication is key!
