The legal term for “stuff” is personal property, which is not real property (land, house or condominium). Personal property can be as diverse as automobiles, jewelry, shares of stock in a cooperative corporation or a china collection. Some personal property can be highly valuable and unique, of sentimental value or of historical interest. Other items of personal property may be a nuisance because they are “junk”, difficult to dispose of and no one wants them.
If one dies intestate (without a Will) there will be an estate administration whereby an administrator is appointed by the Surrogate’s Court to distribute the personal property. In this case, the personal property will be distributed consistent with Estates Powers and Trusts Law Section 4-1.1. If one dies with a Will, the Surrogate’s Court in the probate proceeding will appoint an executor to dispense with the personal property consistent with the terms of the Will. As our readers can see, if one dies without a Will, the statute determines who is entitled to the personal property. If one has a Will drafted by experienced legal professionals , he can specify who should receive his personal possessions.
The standard provision in a Will concerning personal property states something to the effect that “I give my personal property to my children to be divided by them as they may agree”. This clause works adequately if the children get along and will likely agree as to who should receive which items. Obviously, this clause is potentially unmanageable if the kids do not get along or if most of the personal property is junk, leaving only one piece of value. This provision can also be problematic if one or both children are the executor, leaving them to adjudicate the dispute on behalf of themselves. Possible solutions arise from anticipating these issues. If the testator feels that his children will not agree in the future, then he should not have them appointed co-executors in his Will or should state that if they do not agree that the items are to be sold and the proceeds shared.
At times, the standard clause is written as such in order to reduce potential estate taxes. If the Will states, “I give my Monet Water Lillies painting to my son”, the taxing authorities are alerted and may have cause to audit the estate tax returns to confirm that adequate taxes have been paid. Not identifying particular property in a Will is a way to avoid this outcome.
Some clients take the following approach as a means to reduce taxes and to make sure that all family members are treated fairly. In the personal property clause in a Will, a reference is made to a letter or separate document left for family members identifying personal property. In such a letter, the testator may state that “my son is to receive my Tiffany watch and my daughter is to receive my diamond engagement ring”. Appraisals can be obtained in order to achieve monetary equality between relatives. This avoids the taxation issue discussed above. The testator could also distribute personal property prior to death to make sure that the intended recipients receive the items. This could avoid another unpleasant outcome, wherein a family member with access to the sick or deceased relative’s home takes items of value and claims that they are “missing”, making it so that the testator’s wishes are not met.
Our firm would like to assist in the implementation of your intended estate plan so that your “stuff” is in the proper hands.