Chambliss Estate Planning Essentials brings you legal developments and other trends of vital interest in the world of estate planning. This post is brought to you by Peter Harrison and other members of the Estate Planning Practice Group of Chambliss Law Firm.
The thoughts of loved ones fighting over belongings have sent shivers down the spines of many a client (and lawyer too). Trying to prevent that fight has resulted in some innovative solutions and not-so-successful attempts by clients in the past. For those who are worried about how their possessions—whether valuable or sentimental—will be divided among family or friends, here are some of the issues we've seen in the past.
Out-of-date documents: Most wills or revocable trusts have a relatively short provision to deal with the disposition of a decedent's personal property. Where this causes disputes is when the text of the will or trust differs from words or conduct outside of the document. Sometimes the will or trust is old, and a client told family members a different plan. In other cases, a client scratched out passages or scribbled on the will or trust instead of executing a proper codicil or amendment, leaving judges to wonder if the change was the client's intent or the result of nefarious deeds by family members.
Lesson Learned: Review and update your estate planning documents regularly. We recommend reviewing your estate plan at least every three years or after a significant life event takes place, such as marriage, divorce, or death in the family.
Faulty attempts to avoid probate. A second way clients try to minimize family disputes over personal property is to avoid having the assets be part of the probate estate. Usually this happens through a lifetime gift of the property to a family member. Unfortunately, Tennessee case-law shows several instances of these attempts failing because the gifts were deemed incomplete or returned when the donor or the recipient failed to do everything exactly right. As a result, the property went to the estate instead of to the individual.
Lesson Learned: Discuss your plans with an attorney familiar with the requirements and exceptions for a valid gift.
Unclear designations. A third major ground for disputes involving personal property occur where the client's intent is lost or indecipherable. The most obvious examples of this are illegible or missing memoranda from the client noting what property goes to whom. However, this category also includes unusual tactics such as placing sticky notes with children's names or color-coded dots on the items in the house. These unusual methods work fairly well until the sticky notes fall off or the legend saying which child goes to which color is lost. One of our attorneys once had to litigate who would obtain an expensive piece of art when the sticky note on it and several other items had fallen to the floor, becoming mixed. So while these otherwise very clever ways to say who should get what can work, there's a real risk of creating confusion instead of clarity.
Lesson Learned: Do your best to make sure your designations are clearly written (or typed), dated, signed, and securely placed or stored to prevent confusion.
If a client wants to have a hand in directing who should get specific personal possessions, there are several ways to prevent disputes. A specific bequest in a will offers the considerable security of judicial scrutiny to make sure property goes to the right person. For designations you may wish to change in the future, Tennessee law permits a clearly written, dated, and signed memorandum to accompany the last will spelling out who should get what property (other than money, promissory notes, deeds or titles, securities, and property used in a trade or business). Finally, there are occasions where a properly structured gift may be how a client can eliminate a dispute.
To minimize and hopefully avoid disputes over how possessions should be divided, or to review the efficacy of current plans,
please contact us for assistance.