Dividing The “Stuff” - Honoring The Memories

          Grammy's old dresser brings back memories for her children and grandchildren. She had a habit of keeping toys and special gifts in it for her five grandchildren.  Little surprises.  Now that she is gone, they each want the dresser as a way of keeping her memory alive.  They also want to pass on something of her fun spirit to their own children.  While the family sorts through her personal items, the memories come alive. This family talks about their memories and finds a way to honor Grammy while passing on her “joie de vivre”. They see this as an opportunity to remember her life while having some fun.

            In another family, a rocking chair has been passed down in the family since the 1750's. Traditionally, the family with the first child to have a baby got the rocking chair, and then on to the next generation.  The last uncle in the line passed away with no children. Somehow he had kept this valuable antique family heirloom. Now, the nieces and nephews are fighting over the Uncle's estate and the rocking chair is a proxy for years of resentments within the family.  The fight starts over the rocking chair, but if they don't find a way to agree on how to divide all the personal assets, they will face high legal fees as the conflicts grow and boil over.

            If you are handling an estate, tread carefully with how you approach dividing assets.  This job usually lands on the Executor of the Will or the Trustee of the Trust.  Many times the dollar value is not as much of an issue as the emotional value.  Here are a few suggestions on ways to manage passing personal property on to heirs. Each family has its own special personality so think about the particular culture of the family when deciding how to approach this area early in handling an estate.

KISS:   A simple method which is best for low conflict families. Coordinate a date for the family to gather and give notice to everyone.  When they arrive, give each person a stack of post-it notes -   each person with a different color.  As each person wanders through the house, each person “stakes a claim” for the items they want to take home.  If more than one person wants an item, the process decided in advance rules.  The group can decide how to handle the items that are wanted by more than one person.  For instance, one family decided to share a prized necklace between the two girls, with each sister switching off having the necklace every other year. In other families, the tie goes to a coin toss.  In others, a more formal bidding, based on estimated values works.  Keeping it simple.

FAMILY MOVIE NIGHT:   Remember when we used take the whole family to the video story to pick out a movie? Everyone chose some, then everyone had 10 votes (10 fingers). The movie with the most overall votes got to come home for the weekend.  This method is a little bit like that.  It is not perfect, but it can help sort through the stuff rather quickly. 

Items are labeled with an A - F for six rounds.  The first round “A” includes the most valuable items.  Each beneficiary can bid up to 10 votes per round (poker chips work). The items that have more than one person with ten votes goes into the overtime round.  Mark each item won with a color coded label for the person who will be taking it home.  As you move to the next round, it will soon become obvious what items people would like to keep and what items will be sold or donated later.  Get agreement in advance that any items left over can be donated or sold as the Executor or Trustee wishes.

MONOPOLY BIDDING:  This method works best for a family that can handle the division of assets with a bit of light-hearted, fun competition.  It does not work if there are underlying, unresolved tensions. Give an equal amount of Monopoly money to each heir based upon the percentage of inheritance.  For example, if there are four adults with an equal share, each gets an equal amount of Monopoly money.  Give everyone a sheet listing items with estimated values.  Give them a week or so to come to the house and determine what items they would like to take home.  Then select a date for an all family get together.  Hold a silent or audible auction for items.  Decide in advance if the person taking the item will pay for shipping or the cost of shipping will be paid by the estate.  If a family member cannot attend the bidding date, the bids can be accepted in advance.

This process also works if the primary heirs have their own children.  The Monopoly money can be provided to children and grandchildren who are old enough to understand money concepts and won’t be upset if they don’t get something they wanted due to competition.  This can allow everyone in the family to share in the fun.  If children are involved, it might be best to only have the adults participate to avoid the tension that can occur if children become upset.

YOU LIKE IT, YOU BUY IT:  This method works best when all or most family members are not very emotionally tied to family heirlooms, but prefer to get the most value from the estate.  The Executor or Trustee can put all items up for sale,  through an estate auction house or through EBAY.  Any items that a family member would like to keep, can be 'purchased” at some agreed upon discount.  They can either pay for it at the time or use a portion of their inheritance to “pay” the rest of the family for the item. 

This method takes more time to prepare and follow-up.  Before bringing the family in to select items, prepare a detailed list and obtain estimated values for each item.  Take pictures of all items which will be placed on EBAY.  You can send the pictures to family members or post on a family website to find out if there is an interest from family members for any items. You can then obtain appraisals (for larger value items) or estimated values for these items only.  At time of final distribution, the value of the assets distributed to each beneficiary will reduce the amount of cash.  If this method is chosen, be prepared for some bickering over the agreed upon values.  Provide notice for all items that will be distributed by agreed upon values. 

LIQUIDATION  HOUSES:  Some families prefer to use estate liquidators or auction houses to provide a bid on the entire set of household items.  The advantage is that some will remove all the household items from the home.  Some liquidators will only remove some items.  It pays to call and find out how they work and whether it is a consignment or auction method. The liquidators know they will find many items that have little or no value.  If they are willing to provide an “all-in” bid usually it is because they know they can sell some of the items at a significant mark-up.  Many liquidators are actually consignment houses and if the items do not sell, someone must take possession of them. Liquidators consigment rates ususally are lowest (10%) for high value items and highest (39% or more) for lower value items.  Liqudators or auctions houses can provide the assurance that you have gotten a current market value for the items without the hassle of having to market and deliver the items yourself.  CAUTION: If the estate has known collectibles, make sure to get an appraisal on these and consider selling them to collectors or auction houses that specialize in collectibles.

CHARITABLE DONATIONS:  When families' personal assets have little monetary value, a nominal estimated value can be given to the items which are donated. Many charities will pick-up items.  Normally, donations are only a tax write-off when claimed on the final decedent's 1040 tax return, not on any 1041's filed for the estate. Always check with your tax advisor for specific tax advice. 

If this or the sale option is chosen, always make sure to give sufficient and proper notice to all heirs to avoid prolonged conflict after the assets have been donated or sold.

               Finally, since this task is often a pre-cursor to selling or transferring the home, it is important to handle with diplomacy but as quickly as possible. Grief hits people in varying ways and at varying times.  For many people, the personal items are a strong trigger.  Be sensitive and try to find a method that allows the family to process the loss in a  way that fits the family best.

The Stuff - Part 1

         George Carlin once did a very funny bit on “Stuff” on Comic Relief in 1986, a benefit for the homeless.  You can watch part of this famous comedy monologue at George Carlin, "Stuff" Be prepared for some bad language, but it’s still a really funny commentary on how we deal with our stuff.  His main point was: we all have ‘stuff” we don’t really need but other people want, so we want it more.  I have been amazed at the number of times a conflict flares in families, functional as well as dysfunctional, over “the stuff”.  Most stuff remaining after someone has lived well and long has had the value rubbed off or into it, like the Velveteen Rabbit.  Occasionally, items gain monetary or sentimental value over time, but many things just do not improve with use.

            Working as a paralegal in a probate, estates and trusts law firm for over ten years and now as a private, professional fiduciary, I have observed different ways families grapple with the question of what to do with Aunt May’s rocking chair or Grandma’s dresser or Uncle Charley’s guns.  Some families seemed to be able to just go through the house and pick out what they want to keep without much fuss. Maybe Grandma had told them all she wanted this person to have the Pinkie Girl picture and another to have the Blue Boy picture….and they actually wanted it. Usually, this is the fairy tale version. 

More often, families are more concerned with how much cash they can raise or how to get rid of the stuff.  Sometimes, the conflict over stuff becomes an epic battle over small items that mean something to one person, but not to another. One attorney recently told me the story of “Fluffball” in which a beneficiary demanded long lost pictures of a long dead family cat before being willing to move on and close out the estate.  Fluffball has become a symbol to me of all the ways families can stymie closing an estate. Sometimes this is just because it is really hard to say goodbye.  In the end this type of conflict eats up estate resources and can leave hard feelings to linger between family members.

You may have your own version of a “Fluffball” story.  Feel free to send us an email, keeping all real names out of the story to maintain confidentiality. We’ll use the stories in teaching our clients and each other how to get around some of these landmines.

The conflict over stuff usually starts soon and goes hard until people work it out or get tired of fighting over it.  Still, there are many people who sit in a law firm after an estate was closed venting about unfair treatment.  This is especially true if there was not competent legal counsel or a neutral, professional fiduciary assisting the family. One of the regular complaints is that they did not have a chance to keep some special memento of a loved one.  Since memories cannot be priced or purchased, it is important to attempt to give those close to the departed soul a way to keep that special reminder.  It will help bring closure to all involved.

For professionals as well as family fiduciaries, personal property can be some of the most difficult to handle. There is usually no direction provided in the Trust or Will for all the personal items.  Therefore, this must be handled using the fiduciary’s best judgment.  First steps to be taken within the first few days or weeks after the settlor’s passing are as follows:

1)  Who’s Property Is It Anyway?  Determine who is responsible for the personal property.  Who owns it after someone passes away?  This is not always obvious or handled in a legal manner.  The short answer is this, unless you are an only child, don’t assume you own your parent’s personal property.  This could be regarded as a job for the Trustee of a trust, if the trust mentions personal property.  It could also be considered the job for an Executor, if the estate is valued over $150,000. See our website for guidance on small estates. The person who is named as the legal representative of the personal property is the “owner” in order to marshal and distribute the assets. This is where seeking legal counsel early can help you sort out some of these questions. 

2)   Secure the Property. If you are responsible or maybe you just have access to the personal property:  the next job is to secure the home and any personal property located elsewhere. Valuable items have a way of leaving the home if many people have access.  It is always best to change locks and possibly install a security system for the short time the personal property is located in the home.  If you secure the property before you know who is responsible, you should be prepared to act as a fiduciary for all beneficiaries’ interests until the proper person is identified and then pass off all inventory lists and keys to them immediately.  So read on, even if you have not been named as a Trustee or Executor.

3)   Take Inventory. Take pictures of all rooms before doing anything else. Take inventory and sort items, with a witness present. This requires cleaning out the home. Help can be brought in, but take pictures and begin an inventory list of obviously valuable items before any clean-up or organizing is started.  

4)   Value Personal Property. Obtain values for items by looking at Kelly Blue Book for cars; looking at E-Bay or Craigslist for other types of personal property.  You can check with estate liquidators or appraisers if you suspect something might have a market as a collectible. See the site http://finesf.com/surprisingly-valuable/FineLiquidators for examples of collectors’ items. Be very careful of discarding or donating any items which may have value.  I once worked with a family to help close an estate. Their parents had travelled the world and collected stamps. They also saved numerous envelopes with stamps on them, as well as letters from faraway places.  It wasn’t until we took the bags of these items to a stamp collector that we realized the stamps on the envelope with a post date or those from a place no longer in existence were more valuable than the carefully organized multiple sets of international stamps. 

5)   Provide Notice. Provide adequate and equal notice to all beneficiaries and heirs as to when they can review or claim personal assets.  Be as fair to all beneficiaries, included those that are not in the area. Speak with your attorney about how to handle disinherited heirs and how to provide notice in a way that protects you. Trust generally require 45 days notice while court probates have a shorter notice period. Equal communication to all beneficiaries early in the process can help avoid some of the potential litigation that would be caused by not allowing all beneficiaries and family members time to remember the loved one and choose items. 

6)   Get Agreement to Stated Value.  As seen above, even some items that have no monetary value can cause the estate representative to defend against emotional claims by family and beneficiaries.  Avoid this by taking the steps above before distributing anything. Much of the “stuff” we accumulate is often sold at garage sale values when we are no longer using it.  One way to avoid some of the time consuming steps outlined above is to obtain written agreement to a nominal stated value for all personal assets from all beneficiaries. Even if this is done, make sure that everyone has an opportunity to remove mementos by agreement.  

Are you exhausted yet?  Notice, there are quite a few steps to take before distributing or dividing assets.  Don’t start handing stuff out until you sort through the steps above.  Also, take note, cleaning out the home and taking inventory is one of the most time consuming tasks confronting a Trustee or Executor.  It is much harder when you have an emotional need to hang on to the person’s memories.  If you are a family member fiduciary and there is no pressure by other parties, take your time going through the stuff.  You’ll appreciate the memories you uncover.  Eventually, you’ll be ready to let go and move on. 

Once you have started to take inventory, look for our upcoming blog on “The Stuff” Part 2 - Dividing The Stuff to find out how some families divide personal assets. Later, we’ll give you some insights into handling difficult to value assets. For now, remember an appraisal is an estimate of expected sale value. In some situations a formal appraisal by a licensed appraiser is required. In others, an informal appraisal will suffice. Appraisers like to say, only an arm’s length transaction between a willing seller and willing buyer can approach the true value of a particular item at a particular time. 

How To Prevent Medication Errors in the Elderly

Written by Linda Garvin, RN, MSN - Affiliate of The ACE Fiduciary Group

Every year there are countless deaths and hospitalizations resulting from the mismanagement of medication usage. These deaths occur from multiple factors including administration of the incorrect medication, taking drugs improperly and the wrong dose to name a few. We can help reduce these medications accidents and deaths, by implementing some safety precautions. Follow these steps to help your elders...


1. List all the medications prescription medications, over-the-counter drugs and any vitamin and herbal supplements they take.

2. Educate the elderly person about their medications including the desired effects and be familiar with the instructions on how and when to take the medication, possible side effects and drug interactions.

3. Develop a medication usage sheet. Below is one example of how you can list all the medications. A medication list should include the following:

• Name of the medication, color and shape.

• Dosage and frequency

• Reason they are taking the medication

• The date they started taking the medication

• The prescribing physician's name and contact information

• Any special instructions and/or side effects about the medication

4. It is important to have all the medications filled at only one pharmacy. It can be very helpful to develop a relationship with one of the pharmacist' s where the elder picks up their medications. Pharmacists are well trained and can answer your questions about possible drug interactions, side effects and contraindications that your health care provider may not tell you.

5. Keep a list of all the medications the elderly are taking on the refrigerator or by the main telephone they use in a brightly colored folder clearly marked.

6. Ensure that the medications are stored properly [away from the heat or in the refrigerator] and discard any drugs that have expired or have no labels.

7. Instruct the elderly to put on a light when taking medications and never take their drugs in the dark.

8. If the elderly person utilizes a pill box, always have them keep at least one pill in the original medication container for identification purposes.

9. Never have the elderly mix more than one medication in a pill container, especially when traveling.

10. Always have the elderly bring a list of all of the medications they are currently taking when going to a physician appointment.

Linda Winkler Garvin, R.N., M.S.N., of Alameda, California, is a Health Advocate/Consultant & Educator in the Bay Area. You can learn more about her on our website www.acefiduciary.com or at www.LindaGarvin.com.

Life, Love, Law & The Practice of All

A dialog between a fiduciary and attorney about spouses working together, co-written by Loren & Frank Acuña. Published in the Contra Costa Lawyer - Online Magazine, February 2012

“A long marriage is two people trying to dance a duet and two solos at the same time”. ~ Anne Taylor Fleming

We started working together after Loren obtained her M.B.A. from U.S.C. and left investment banking.  Frank’s estate planning practice was growing and he needed help with probate cases and business systems planning.  We both thought it would only be for a short time.  The office was near Las Lomas High School where our kids would eventually land. Working together seemed like a good way for both of us to balance careers and parenting.
Combining the excitement of a start-up and the anxiety of what it might mean to work together, we sketched out a plan for Loren to have her own role in the law firm, using her skills and background to best use.   

Loren:  I started out trying to bring the “Big Business” ideas I had studied in business school to Frank’s boutique, personal-service firm.  Wrong approach.  Eventually, I learned to embrace the joy in helping individuals with the wide variety of issues that surround planning for the transition of wealth to the next generation.   After learning the craft, I was better able to build processes that worked in that firm’s culture.

Frank: As the business changed and grew, so did Loren’s role.  At first, she worked on discrete projects and probate cases; then she took on the role of senior paralegal for probate, conservatorship, and trust administration practice.  Then, as growth exploded, her role expanded to include managing cash flow and system improvements needed for a growing law firm.

Loren: Frank is a wonderful strategic thinker and he loves marketing (I used to tell him that discussing marketing was like having dessert; it was always added as the last item on any firm meeting agenda).  When meeting with clients, he can quickly analyze legal situations and explain concepts so his clients can easily grasp them. Because Frank spends many hours speaking to various professional groups, we developed a system that enabled him to supervise, delegate, and keep doing what he enjoys most.

Frank: Loren’s skills are more focused on digging into a subject until she  understands it completely and thoroughly.  I tease her about being like “a raccoon with a rock”, researching and examining a problem from all sides until she can develop a series of steps; a spreadsheet; a database; or, other tools to make the work more effective. I loved it because it gave me time to work on cases and to look for new opportunities. 

Loren: Frank helped me develop an expertise in estates and trust by encouraging me to research and by allowing me to build an approach to this practice area.  I helped him build his business by setting up systems that could be transferred to new staff and reduce costs. Together, we developed a set of values to build our business upon:  Empathy, Expertise, and Effectiveness.  Our entire team dedicated themselves to making sure that our clients would experience these values on every matter we touched.  This legacy continues in his law practice and in my professional fiduciary firm.

Frank: As our children graduated from high school, Loren had a dream of starting her own business.  She obtained her license as a professional fiduciary and now serves clients directly and with a team of professionals.   I continue to practice as an estate planning, probate, and trust specialist with Acuña, Regli & Klein, LLP.

Loren: The children have moved on to college and careers and we are in a new season together.  I am excited about the opportunity to explore my own directions; spread my wings and to use my education, financial background, and my years of experience working in my husband's law firm. When we worked together in the same office, we would occasionally feel a little too close for comfort.  However, we now miss the closeness and camaraderie we shared every day for ten years. 

Frank: There is nothing like the level of trust you have in working with someone whose life, love and future are so intimately tied with your own. 

Final Thoughts: We respect each other’s skills and abilities in a way that would not be possible if we had not worked together.  We continue to support and encourage each other, but we also respect conflict of interest rules as well as a fiduciary’s duty of independent oversight as to professionals hired. Therefore, we each have our own office and find few, if any, opportunities to work together these days.

Loren R. Acuña, is a private fiduciary with The ACE Fiduciary Group.  You can obtain more information about her skills and background at www.ACEfidcuiary.com or by contacting her at (925) 906-1882, or by email at Loren@ACEfiduciary.com.
         
Frank R. Acuña, a partner with Acuña, Regli & Klein, LLP, is a State Bar of California certified specialist in Estate Planning, Probate and Trust Administration.  He can be contacted at www.AcunaRegliKlein.com (925) 906-1880 or ohc@AcunaRegliKlein.com.