When the phrase “estate planning” comes up, we tend to think about the major financial assets: money, investment accounts and the like, as well as real estate. But in my experience, it’s how a person’s other possessions – their physical “stuff” – gets disposed of that often creates the biggest problems.
It’s not too hard to understand why that is.
Those possessions that formed the background for a person’s upbringing will often carry emotional weight far out of proportion to their actual value. When children and grandchildren are faced with how to divide up the familiar artifacts from their childhood and youth, it can easily lead to conflict.
More than once I have been required to step in and mediate in these situations. The heirs of my clients just can’t agree on what to do with these items that have such sentimental value to them.
It’s far better, if only to help maintain family harmony, if the estate’s owner makes these decisions while still living.
This doesn’t have to be a complicated process. It can start with a simple walk through the house with a notepad and pencil, making a basic inventory. While making note of items, ideally by category, think about what might be especially important for individual relatives. Did one child especially love playing “dress up” with certain jewelry as a child? Has a grandchild ever expressed admiration for a particular work of art? Does a piece of furniture have special meaning for one member of the family?
In the same spirit, it might be worthwhile to designate whole categories of possessions to be disposed of in other ways. A collector of rare books might want to have them sold and the proceeds donated to a favorite charity, for example, thus avoiding the chance of conflicts among the heirs.
Once you’ve decided what you want to leave and to whom, the next step is to write it down in the form of a memorandum. If this is done correctly, it’s a huge help to people like me who are tasked with settling the estate. Of course, it also helps the heirs if they know exactly what your wishes were.
It’s important that this memorandum be in your handwriting, so there’s no question that you wrote it. Give it the title “memorandum,” and leave it with your other most important papers. This should NOT be labeled as a will, or use the word “will” anywhere in its title. That could cause this wish list to be considered a holographic will that could supersede the actual will during the probate process.
Doing it wrong could be worse than not doing it at all!
Of course, many people find it hard to think about this step. Deciding who will get your possessions does require thinking about your own mortality. And it’s precisely because of the emotional value of a lifetime’s accumulated property that some people prefer not to make these decisions.
The consequence can be that children fight over the possessions more than they would over money. Often those fights are about things that aren’t even worth anything, or at least wouldn’t have any value for an outsider.
Once I had to play referee among four adult children, all of them in their 60s or older, who couldn’t agree on how to split up their parents’ personal property. The parents had steadily downsized, eventually living in a nursing home, so they had only a modest amount of property left in a small apartment. But even though they had so little to divvy up, their heirs had to call on me to intervene.
My solution was to have the four of them draw straws to see who would go first, then administered a round-robin for each to go through the apartment and choose from the few furnishings left. That included costume jewelry, including such low-value items as a pair of powder-blue earrings from the 1970s! By the time we were done I worried that there might be a couple more estates to settle, and possibly bail to be set.
Needless to say, it was not a pleasant experience for me or for those directly concerned.
This happened more than 10 years ago, but it still haunts me.
That is why I make such a point to urge all my clients to think ahead, and designate how their property is to be divided, so it doesn’t become a point of contention among their survivors.
Old North State Trust, LLC (ONST) periodically produces publications as a service to clients and friends. The information contained in these publications is intended to provide general information about issues related to trust, investment and estate related topics. Readers should be aware that the facts may vary depending upon individual circumstances. The information contained in these publications is intended solely for informational purposes, is proprietary to ONST and is not guaranteed to be accurate, complete or timely.
Susan Willett is the director of trust services and oversees all aspects of trust administration for Old North State Trust, LLC. Old North State Trust, a North Carolina chartered trust company, provides: asset management services; income, estate and trust tax consulting; retirement planning and administration; and trustee and estate services to both individuals and businesses. Old North State Trust professionals have many years of experience and for over a decade have assisted clients in identifying and reaching their financial goals. For more information, visit www.oldnorthstatetrust.com or call 910-399-5470.
Christina Haley O'Neal - Oct 15, 2019
Christina Haley O'Neal - Oct 16, 2019
Jessica Maurer - Oct 16, 2019
Cece Nunn - Oct 16, 2019
Johanna Cano - Oct 17, 2019
Area executives and institutional leaders are set to talk about the future of the local, national and global economy at the annual Economic...
Live Oak Private Wealth, an SEC-registered investment adviser and subsidiary of Live Oak Bank, has launched trust and estate planning servic...
New Hanover Regional Medical Center recently launched a smartphone app to help patients get around its main South 17th Street campus and to...