A Memorandum of Personal Property
One of the issues you'll want to consider when you're planning your estate is how you want your personal effects to be distributed, including things like jewelry, collectibles, antiques, artwork, clothing, furniture, and electronic equipment. If you have specific people in mind to receive certain items, you can make a list of who should inherit what in a document called a memorandum of personal property that's separate from a last will and testament. You can also prepare a personal property memorandum if you're using a revocable living trust rather than a will as the core of your estate plan.
To add legitimacy to the memorandum, you must mention it in your will or trust. And it's a good idea to mention in the memorandum that this is the list of personal possessions referred to in the will.
You should also sign and date it, and though it's not generally necessary to have it notarized, having a witness or two wouldn't hurt.
Benefits of a Personal Property Memorandum
The reason for making this separate list, rather than including all the personal items in your will or trust, is that if you later decide you want to change who gets what, you don't have to create a formal codicil to the will or a trust amendment to implement the changes. It's much easier to simply detach an old memorandum and replace it with the updated one.
State Laws Regarding the Memorandums
Your state of residence's laws will determine whether an informal memorandum of personal property will be legally binding on your beneficiaries and how it should be worded. If you have any doubts, you should consult with a local estate planning attorney to ensure the memorandum would be upheld by a probate court.
Most states recognize memorandums of personal property as legally binding, but the following 20 states don't consider them to be legitimate legal documents:
- New Hampshire
- New York
- North Carolina
- Rhode Island
- West Virginia
If you live in one of those states, you will have to include your property allocations in your will or trust.
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 actually be much different. In many cases, when a list of personal effects—especially one that's in their relative's own handwriting—is presented to beneficiaries, there aren't any arguments about who gets what, unless your family members are especially contentious or greedy.
Keep in mind that this list should include only tangible pieces of property.
Cash, securities, and real estate should not be included in the memorandum. Neither should cars, boats, or other vehicles for which a title is necessary to convey ownership.
If there's a possibility of confusion, make sure you describe the items clearly enough that the executor of your estate will be able to distribute property according to your wishes. If you have two antique wooden chairs, make it clear that daughter Julia, who has always admired it, gets the Stickley with the blue cushioned seat and son Joe, who likes austere furniture, gets the Shaker with the unpadded seat.
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 other estate planning documents. And give it to your estate planning attorney for review if you make any changes beyond simple ones involving item and recipient names.