Big Battles Over Little Things
People work their entire lives to create a nest egg and hopefully leave a lasting, positive legacy for their children and grandchildren. There are all sorts of tools to make sure these things happen. People invest in retirement plans, create Wills and Trusts and even make plans to direct their healthcare should they become incapacitated. But this article is not about creating or implementing those strategies. Here I want to talk about something that many people either forget to consider or don’t think is important enough to address: who will get your personal effects when you pass.
A Couple Real Life Examples
Some of the nastiest family battles erupt over items with little or no dollar value. I recently read about a situation involving three adult siblings who fought over a stainless steel ice cream scoop that belonged to their grandmother. She regularly used it to serve them dessert when they stayed the night at her house as children. The siblings argued over who would get that scoop when their grandmother died; the dollar value of which was relatively insignificant but from the kids’ point of view represented a significant part of their childhood. Another similar case involved two brothers who spent a total of about $40,000 fighting over several items of personal property in their father’s estate. The objects themselves were relatively insignificant to anyone else with a combined value of less than $1,500, yet tens of thousands of dollars were spent fighting over who would get them.
Both of these examples show the kind of craziness that can result when these decisions are left to your loved ones. Unlike financial assets or real property that can be given an objective financial valuation, small items of personal property are oftentimes the hardest to deal with because their worth is determined not in dollars but in sentimental value, becoming objects of bitter feuds that may develop or worsen an already existing difficult relationship.
Start by Asking Questions
There is a responsibility when it comes to leaving assets when you die. As a parent you should lead your family and do what you can to minimize infighting and promote family peace. There are constructive ways to avoid conflict by proactively deciding who will get what at your death. As we age, we can ask those close to us if there is anything of sentimental value that they would ultimately like to keep. Have your adult children expressed an interest in a particular item of yours? Is there a family heirloom that cannot possibly be divided? Has a close family friend provided you with great support and love in your lifetime such that you would like for them to feel acknowledged at your death? Have a transition plan that your family can implement and secure the future of those you love.
What You Can Do
Hopefully not everyone will want the same things but if they do it provides you with an opportunity to consider their wishes and make informed decisions. One option is to simply make the tough call as to where the property will go or you can leave the decision making up to a trustee (not advisable). Another option is to create a process for your beneficiaries to follow such as letting them draw by lots or have them choose the items based on birth order. If you have a specific item of property of particularly high value you can give that asset to a named person and reduce that person’s share of other assets. You could also direct that the item be sold at your death giving anyone who wants it an option to purchase it from their portion of their estate proceeds and/or their own assets. Whatever process you choose, if your beneficiaries are required to follow it there will be far fewer hurt feelings than if left to their own devices.
Many problems of inheritance are themselves inherited. You can protect your most important legacy by planning ahead.
Email or call Lynn K. Girvin to learn more about planning for your family! 949-387-8707