What Is a Memorandum of Personal Property?
It can be helpful to spell out some of your wishes in a personal property memorandum when you prepare your estate plan, particularly if your estate plan is centered on a will.
One of the issues you'll want to consider when you're writing your last will and testament is how you want your personal effects distributed, including things like jewelry, collectibles, antiques, and artwork. If you have specific people in mind to receive certain items, you can list them and the property you'd like them to receive in a separate writing called a Memorandum of Tangible Personal Property.
You can also prepare a memorandum if you use a revocable living trust rather than a will as the core of your estate plan.
Benefits of a Personal Property Memorandum
Why not just include the list right in your last will and testament or revocable living trust? Because if you later decide that you want to change who gets what, you would then have to sign a formal codicil or trust amendment to change the terms of your will or trust.
If you use a personal property memorandum, you can change these bequests without worrying about all the formalities of signing and having a codicil or amendment witnessed. It's usually far easier to simply detach an old memorandum and replace it with a new one when you want to make changes.
State Laws Dictate the Validity of Personal Property Memorandums
Your state's laws will determine whether an informal memorandum of personal property will be legally binding on your beneficiaries, Consult with a local estate planning attorney if you decide you want to make a list of who you want to receive your personal effects. Your attorney can guide you in the proper procedure under your state's laws to ensure that the memorandum will be upheld by the court.
Some states require that the memorandum must be specifically mentioned in your last will and testament or revocable living trust, while others simply won't recognize this type of an informal list at all.
The Practical Side of Personal Property Memorandums
Although state laws will dictate whether your memorandum will be legally binding on your beneficiaries, the reality of the situation can be much different. In many cases when a list of personal effects—especially one that's in the decedent's own handwriting—is presented to the beneficiaries, there usually aren't any arguments about who gets what.
Another very effective technique is to have the personal items appraised. The testator, the person making the will, can then mark who gets what next to each of the items listed on the appraisal. This can be helpful when the client anticipates there will be a fight over their possessions.
Who really wants to argue when it's all in mom's own handwriting? In these situations, common sense and a practical solution may overcome the strict requirements of the law.
If you decide to prepare a memorandum, make sure you update the list if you sell, lose or give away an item, or if a beneficiary you've named predeceases you. Keep the list in a safe place, ideally attached to your original estate planning documents. Give it to your estate planning attorney for review if you make any changes.