By: Barry E. Haimo, Esq.
August 15, 2019
The Benefits of Creating a Tangible Personal Property List
You might realize that you have a set of china that a good friend admires greatly. Or perhaps you have a painting that has caught your niece’s eye for years, while your nephew loves your vintage record collection.
For some individuals, the personal items they inherit are just as important as other forms of inheritance like cash, investment accounts, and real estate. A family heirloom, for instance, will likely have more sentimental value than a bank account.
All of these small gifts constitute your tangible personal property collection. This includes items such as antiques, cars, artwork, jewelry, collectibles, and more. So how do you ensure these items go to the right people after you pass?
A Tangible Personal Property List
You don’t necessarily have to itemize your personal items in your last will and testament. You could pass them on during your lifetime to make sure that a particular friend or family member gets them. Your will may also direct that any tangible personal property not listed will be distributed among certain individuals, such as spouses, children, and friends.
However, if you wish for specific individuals to inherit specific items and aren’t able to pass them on in life, you can create a separate list detailing how to pass these on. This list of tangible personal property is often referred to as a memorandum of tangible personal property or personal property memorandum.
After signing, this document becomes a legally binding personal property memorandum. And it can be used to direct how your personal items get distributed when you pass away.
Why should you consider creating one?
Benefits of a Tangible Personal Property List
It’s fairly easy to prepare a personal property memorandum. Many states, including Florida, allow their citizens to make legally binding personal property memoranda and incorporate them into their wills or trusts.
As long as it’s properly dated and signed, you can refer to it in your will, and it will be legally binding. You don’t even have to sign it in front of witnesses as you do with a will.
It’s a snap to change.
Another advantage of having a personal property memorandum is the freedom it gives you. You can make changes to the bequests without going through all the legal formalities involved with amending a will or trust.
You can simply detach an old personal property memorandum from your will or trust and replace it with a new one that includes the new changes you made to your personal property bequests. Even if an estate planning attorney drew up your original will and memorandum, making a new memorandum will not affect the original will.
It provides peace of mind.
You might think that you can simply meet with the people you want to pass specific items on to, but life has a way of throwing us curve balls.
Creating a personal property memorandum is a way of making your wishes about your tangible property legal and binding, so you don’t have to worry about it anymore.
What a Tangible Personal Property List Doesn’t Cover
A personal property memorandum can’t be used for intangible property, including:
- Real estate
- Bank accounts
- Stocks and bonds
Additionally, a personal property memorandum will have no effect unless it’s explicitly referred to in a valid will or trust.
To avoid potential issues, talk to an experienced estate planning attorney about your personal property memorandum. A knowledgeable attorney will be able to show you how to go about writing a legally binding memorandum as well as how to correctly refer to it in your will or trust.
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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