Q When our dad died, my sister cleaned out his condo and “donated” most of his personal property to charities. My siblings and I wanted some of his personal items but now they are gone. I don’t know why she did this, is this how it is normally handled?
A Well, like so much else in the estate administration world, it depends. Is your sister the trustee or executor of your father’s estate? What does his will or trust say about the distribution of personal property? In my 30-plus years of administering estates, I find that how personal property is handled can be a flashpoint and cause serious problems in families. Personal property needs to be treated with care.
Most estate planning documents address personal property in one of three ways. Some will state something like, “I may leave a list of personal property to be distributed to certain individuals on my death. If there is no list, then I leave my personal property to my children to be divided equally, as they shall agree.”
Other documents may be silent on the distribution of personal property and leave “all assets equally to my children.”
A bit less clear on what was intended, but in this case the trustee or executor should make every attempt to equally distribute personal property to the kids.
And then there are documents that instruct the trustee to sell, donate or discard personal property at the trustee’s discretion. In this case, a trustee should offer personal items like family photos, jewelry or family heirlooms to the children, if any, and then follow the instructions to sell, donate or discard the rest.
Because the language allows the trustee discretion, personal property can be offered to the family. When personal property is sold, a trustee will usually realize pennies on the dollar so if a family member wants items and could use them, they should go to family.
As you can imagine, when one family member wants most of the personal property and the rest of the family wants it sold so they get the proceeds, problems can arise. In this case a trustee can have the items appraised and then reduce that child’s share of the estate by that amount. All the beneficiaries should agree this is the way it will be handled. Unless expensive artwork or other collectibles are on hand, the value of personal property is usually de minimis.
Most documents, when addressing personal property, will outline what is meant by stating something like, “Personal property shall include jewelry, artwork, furniture, clothing” and so on. If the documents are silent on what is considered personal property, then everything that is tangible (something you can touch), is included. Along with art, jewelry, furniture, etc., this would include automobiles, travel trailers or coin collections.One holiday when my sister and I were visiting with my mother, Mom came out from her bedroom with both hands behind her back and told us to “pick one.” She then handed each of us a beautiful box with approximately half her jewelry in each. It is called “giving with warm hands” and, as you can see, so many years later it is still a fond memory. It may have also sidestepped later disputes between my sister and I as to who gets which piece.
Should your sister have donated personal property before you had a chance to receive something you may have cherished and that would forever bring you fond memories of your father? No, she should not have but, is it possible that your dad instructed her to do this before he passed? Had he previously given most of his treasured personal property to you kids “with warm hands?” It is unfortunate she didn’t discuss it with all of you before she took this step, but hopefully you can move past this.
To parents reading this, estate plans are personal to us and should be written to reflect our wishes. Also, we know our kids best so consider how they will interact if a document says to “equally divide personal property” on our death. Disputes in estate settlement can result in years, if not lifetimes, of hurt feelings and conflict between siblings. We should do everything we can to avoid or at least reduce this possibility.
Liza Horvath has over 30 years experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust Management Company. This is not intended to be legal or tax advice. If you have a question call (831) 646-5262 or email liza@montereytrust.com