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.
