Basic Parts of Your Estate Plan – the Memorandum

I received a call after last months article that asked to just go over the basic parts of the many documents of an estate plan. So for the next couple of months, I will try to explain how the parts work. These specific questions were related to leaving personal property.

So let’s start with what is often the last page of your Last Will and Testament, the Memorandum of Personal Property.

This memorandum is normally an attachment provided by your attorney that is nothing more than a way for you to make a list. The purpose of this list is to encourage you to (a) identify items that are meaningful to you, or a family member; and (b) identify who you would like to receive that item.

It is that simple. For example, I have my 12 gauge shotgun I received when I moved to Arkansas. It is of basically no value, but it is a piece that one of my sons has already “staked his claim” to. So, on my memorandum, I have written “12 Gauge Shotgun”, “Serial Number” and the “Name” of the son.

You can go as far with this list as you wish. The better you can define an item the easier the distribution later. I once had a client who had a house full of vases. Her memorandum, which we reviewed while she was living, indicated that the “vase by the fireplace” went to a specific person. So when I walked over to the vase and said so “this one”. She said “no”. Then it hit her, she had moved that vase into the other room. So the one vase that her very special niece wanted was now scheduled to be sold in her eventual estate sale.

So, how do we keep that from happening? Take a picture of the piece, and reference the picture in the memorandum. Most of us have cameras on our phones, so creating a catalog of the items is pretty simple. We have even written the name of the person on a piece of paper and then photographed the name in the picture. This way the item can be moved anywhere in the house and not be tied to a “location”. If the item cannot be found when the owner has passed, that gift just lapses.

What if you change your mind? That’s simple enough; you can draw a line through the memorandum, date the line and initial it. We will consider it removed. You can also write a new memorandum any time you want to, but that can become cumbersome.

Lots of people write the name of the person on the back of the item. That normally works as well, but years of heat on tape often has a negative impact. But that is certainly available. Please don’t write the name on a glass item with a permanent marker, or on the back of a photo, eventually, it won’t come off. I know that sounds like common sense, but your hair dryer box also tells you “not to use the item in the shower”. We have seen instances when the recipient could not remove the name from the item. If there happens to be two names, (because people often do change their mind), then it really becomes and issue.

What if you want someone to have an item in the future, for example your jewelry, but not until they become an adult. One choice is to let your trustee store it, that way it will be secured, and accounted for until the target age. I have had families plan to leave the items in safe deposit boxes until a certain date, when the younger person can then have access to it. I am not certain how well that works, you should probably speak with your bank about that alternative. If it works, prepay the rental until that date and you might be safe.

If you have items in your home that are of greater value than they appear, make certain your trustee or executor is aware of the value. A picture from an artist in the Southwest has a lot more value in Arizona than in Arkansas. So it is really helpful to know of its origin. I once sold a picture for over $20,000 that originally appraised in Arkansas at $250. The client sharing his knowledge of the artist and the picture was very helpful.