Tag Archives: tangible personal property

Trusts and Pour Over Wills

Dear Liza,  My husband and I are having a disagreement about how to set up our living trust. (We are using online trust software.) He says that our will designates how to disperse the trust, after both of us die and the two designated trustees who are in charge of the trust will need to follow the will’s direction and that the trust is merely a holder of property and we don’t “need” to add all the beneficiaries to the trust document, that the will suffices. I say that we need to designate all the beneficiaries in the trust itself and clarify that all the property in the trust, unless specifically designated otherwise, will be inherited equally by our six children and that the will is for designating who gets the red pot or the carpet, etc., that sort of thing. Who’s right? So, one of the really nice things about being an estate planning attorney is that I hardly ever have to weigh in on marital disputes. On this one, though, I’m on your side. As a general rule, a living trust is designed to hold your property that would otherwise be subject to a probate proceeding at the death of the second of you–usually your house and your large brokerage and bank accounts. The assets in that trust pass by the terms of the trust itself. The ‘Trustees can’t follow the instructions in the Will, they have to follow what the trust says.

 The Will, in this scenario, is designed to transfer any assets that you owned at death that weren’t in the trust into the trust at that point. That’s why this Will is often called a ‘pour-over’ Will– like the saucer under a teacup, it picks up the property you’ve left outside of the trust and pours it into the trust (the cup) after your death. Often, too, your tangible personal property (jewelry, furniture, red pot, clothes, etc) are distributed under the terms of the Will, but sometimes these assets also pass into the trust to be distributed there.  So, make the trust the document that contains your wishes for the distribution of your estate, and let the Will just do the cleanup job for you.

Stuff in the House: Tangible Personal Property

Dear Liza: My mother is 79 years old and is on social security.  She and her brother own a house together.  At this point, I really don’t care if her brother has control of the property.  But I do care if the contents of the house are legally given to him.  Does he have rights to the contents of the furniture in the house?   Does my mother need a Will and would that Will prevent her estate from going into probate?   Your mother’s furniture and furnishings are what’s called “tangible personal property.” This is lawyer-speak for all the stuff in her house: pots, pans, rubber bands, and the couch. That property will pass to you and your siblings if your mother executes a simple Will and gives her tangible personal property and any other assets she owns to her children.  If the house is owned in joint tenancy, the surviving joint tenant (your uncle) would own the property upon your mother’s death, by what’s called “right of survivorship.”  The house passes to him because of the way he and your mother owned it.  But the tangibles, and anything else your mother owned other than the house, would pass to her kids via her Will.  If all she really has at this point are those tangibles, no probate would be required because states exclude small estates from the necessity of a probate proceeding.  Nolo offers a simple Will that would do the trick.

Leaving Gold Coins, Jewelery, and other tangible personal property

Dear Liza: I collect estate jewelry, and ancient and antique coins.  As I am inventorying my belongings to determine what should be left to whom, I wonder if this all needs to be spelled out in the document, or if I can maintain an inventory spreadsheet with pictures of the items.  Or would I need to go ahead and spell out every single item in the will itself, updating the will every year or two? So, estate jewelry, and coins, and the like are what’s called “tangible personal property” in estate planning. These are items that you own, but that don’t have a title document (like a deed, or a pink slip). Often, a Will will leave all such tangibles to a spouse or to children. Sometimes, a Will will say that the testator (that’s the person making the Will) may leave a separate, signed list, with gifts to specific people of specific objects. That might work best for you. That way, you can update that list periodically, without the expense of having to update your Will. If your collection is really valuable, you might want to transfer it to a living trust, to avoid a probate proceeding upon your death–but that’s pretty unusual and only appropriate if the value of those tangible items are high, such as with a Steinway piano, or vauable jewelery.