In any estate administration, one of the biggest “gray” areas is what to do with the physical, personal stuff. Is there monetary value? Maybe. Is there sentimental value? Probably. Are they the same thing? No. The following are some ideas to help navigate this dilemma.
First and foremost, any estate plan should include a “tangible personal property” provision written into a will or trust that allows you to earmark special items for individuals. This list typically trumps other directed gifts and doesn’t require a formal amendment to will or trust to modify. That could be your diamond ring directed to niece Mabel or a special mug collection for cousin Ernie. The “who” can be any individual, related or not. This list ensures that (provided you haven’t given it away during your lifetime) your special items go to the intended individual.
Second, as you age and downsize, DECLUTTER! Have a conversation with your heirs about what items they really want versus what is collecting dust in your basement. A child can only hold so many heirlooms. A huge cost of administering an estate, probate or non-probate, is sorting through items of personal property, determining what can/should be sold, and completing a sale. Frankly, it rarely brings in significant dollars and the expense of a sale can often outweigh the benefit to the estate. Heirlooms should probably never fill more than half your physical living space.
Third, consider making the gift while you are still alive. This “lifetime gift” gives you the opportunity to see your loved ones appreciate your gift AND gives you the opportunity to share why the gift is sentimentally valuable. Share with your family why the mug collection is special and share why you’re directing it to that specific individual. Doing so not only creates a positive memory for your loved one but also avoids emotional disagreements after you are gone.
Finally, kids, have the conversation with mom and dad. Odds are you will be handling their estate administration. For all the reasons above, do them and yourself a favor and help them sort through what is truly special to them and direct it where they wish it to go. They will enjoy spending time with you and sharing stories and you’ll alleviate an unnecessary emotional headache after they’re gone.