WHAT HAPPENS TO A PERSON’S TANGIBLE PERSONAL PROPERTY WHEN THEY DIE?

When someone dies, the disposition of their personal items, heirlooms and keepsakes are often the greatest source of contention among their surviving family members. However, during their lifetime many people fail to make arrangements to direct how those personal items should be distributed upon their death. Sometimes they make verbal assurances to certain family members during their lifetime, promising to leave them certain items upon death, but those promises are never put into writing. In order to avoid conflicts over the distribution of such items, and possibly avoid a lifetime of hard feelings between surviving relatives, it’s important to properly address these issues in your estate plan.

WHAT IS TANGIBLE PERSONAL PROPERTY?

The term tangible personal property refers to items of a personal nature, including things such as household goods, furniture, furnishings, jewelry, precious stones, photographs, books, silverware, china, crystal, antiques, paintings, sculptures and other works of art, collections, clothing, tools, machinery, equipment, appliances, automobiles, watercraft, recreational vehicles and equipment, pets, and other such personal effects

Tangible personal property does not include assets such as money, real estate, securities, stocks, bank accounts, investment accounts, promissory notes, IOU’s, or similar assets.

HOW TO PLAN FOR THE DISTRIBUTION OF TANGIBLE PERSONAL PROPERTY AT DEATH.

Proper estate planning is important for several reasons, not just to address the disposition of tangible personal property. But as mentioned above, failure to address those tangible items can create some long-standing conflict among surviving relatives. So, what’s the best way to plan for the disposition of tangible personal property items?

An experienced estate planning attorney can draft specific bequest language in your Last Will & Testament specifying certain individuals who will receive certain items of tangible personal property upon your death. These types of specific bequests can also be incorporated into your Living Trust if you have one. While this is a great way to help ensure the intended beneficiaries will receive the item or items you wanted them to receive, be aware that if you later change your mind about the disposition of a certain item it will be necessary to properly prepare and execute a codicil to your Will, or an amendment to your Trust, in order to make the desired changes. But what if you could personally prepare your own written instructions concerning the disposition of your tangible personal property items, and change those instructions whenever you desired? Read on.

TANGIBLE PERSONAL PROPERTY MEMORANDUM

In Wisconsin a person can create a separate writing (separate from their Last Will & Testament or Trust), which can designate particular individuals to receive specific items of tangible personal property at death. These separate writings are often referred to as a Tangible Personal Property Memorandum. A significant advantage of using such a memorandum is that it allows the drafter to revise or change it as many times as desired during their lifetime without having to amend their Will or Trust.

It is important to note that in order for a Tangible Personal Property Memorandum to be valid it must be properly referenced in your Last Will & Testament or your Trust. Therefore, it is important that you seek the assistance of a qualified estate planning attorney who can assist you with the preparation of your estate planning documents.

OTHER REQUIREMENTS OF A TANGIBLE PERSONAL PROPERTY MEMORANDUM

In Wisconsin, the following legal requirements apply to Tangible Personal Property Memorandums:

  • The memorandum must describe the tangible property and the intended beneficiaries with reasonable certainty.
  • The memorandum must be signed and dated by the decedent.
  • The memorandum must be properly referenced within your Last Will & Testament or Trust.
  • The memorandum cannot dispose of property that is already specifically disposed of in your Last Will & Testament or Trust.

FAILING TO PLAN

As the old saying goes, “failing to plan is planning to fail”. This couldn’t be truer when it comes to estate planning. Failing to make a proper estate plan can create a long list of problems for the loved ones you leave behind. As for your tangible personal property, if you die intestate (without a Will or Trust) these items will likely be subject to probate and will pass to your heirs at law under the laws of intestacy. This could result in significant time and cost, and the laws of intestacy may require a property distribution that is much different than you would have planned. To learn more about estate planning and Tangible Personal Property Memorandums, contact Attorney Stephen Kosa today.