Avoiding family fights over “stuff”

When I meet with clients to discuss estate planning, one of the issues I bring up is the disposition of tangible personal property as part of their estate planning.   I will call this people’s “stuff.”  Examples of tangible personal property (“stuff”) are things you can touch, such as household effects, jewelry, tools, coins, and furniture.   These items may have more of sentimental value and can be difficult to assess a monetary value in many cases.

Indiana law allows a person to sign/date a Memorandum, or list, of items if owned, to go to certain people that can be referenced into their estate planning documents.  Some clients will give their stuff away during their lifetimes, or label them with names on their stuff who shall receive it.

With blended families, and second and subsequent families it can make splitting of the estate even more contentious and emotional.  Most clients think it won’t be a problem to split up their stuff upon passing, but many times this is not true. 

Most estate planning documents just say a percentage or fraction that is divided up between heirs, unless a Memorandum or list is in place.  How do you determine a value? Sometimes appraisals are obtained but stuff can have more sentimental value, than monetary.

I have seen and used several mechanisms over the years.  A lottery provision where items are labeled with numbers and alternatively drawn out of a hat.  Or, the heirs could put groups of items in sets based on similar value as they agree and alternate choices of these items; or just alternate choosing from any and all items of tangible personal property of the estate.  Another option is all of the heirs get “play money” and can bid at open or sealed bid auction with other heirs to “buy” stuff from the estate.

Indiana law allows clients to include a “no contest” clause in a Last Will and Testament and/or Trust; but it is still important to have a mechanism to distribute tangible personal property. Family elder law mediation groups are also sprouting up that can help families settle who are at an impasse on distribution of tangible personal property.

Many times clients will just want all of the items sold and net proceeds distributed; or if no monetary or sentimental value as determined by their Executor, to be donated to a local charity.

It is important for clients to discuss with family and include wishes in their estate planning documents.