What is a personal property memorandum? It is a frequently-used estate planning document that provides an opportunity to expand upon your will or trust. Many wills or trusts simply divide the whole of an estate equally between surviving family members. But, what if you’d prefer a more detailed plan for particular items you want to leave to specific individuals?
If you’d like to ensure that specific property or items in your estate are left to certain relatives or friends, a personal property memorandum is a great option. It’s a detailed accounting of items of personal property listed with the corresponding person you’d like to receive those items.
It’s simple but powerful, and we can assist you in making one. The best personal property memorandum will work in concert with your will or trust to bequeath your estate and belongings exactly as you want. Further, it must be referenced in the will or trust to be effective. Here are four tips we need to consider that’ll ensure your memorandum works as desired.
When preparing your memorandum, include specific, detailed descriptions of each piece of property. For example, if describing a car, it’s best to add identifying descriptors such as model year, model number, and color. When conveying that you’d like someone to receive a piano, rather than simply “piano,” write “my black 1980 Steinway grand piano.” For an even more exact description, you may choose to include a photograph, especially if you own many similar items.
Be specific about who will receive the item
Because a personal property memorandum is a legal document, you’ll want to use a full legal name and relationship. Avoid confusion that could arise from listing only a relationship, using a nickname, or other ambiguity. Your list will be clearest if you write “my daughter, Emily Smith,” as opposed to just “Emily.” Readers of the memorandum will know your intent without a doubt if they see “my daughter, Emily Smith, to receive my 1980 black Steinway grand piano.” Remember, when the memorandum becomes effective, you’ll be deceased so no one will be able to ask you for clarification.
Update your property memorandum frequently
For this document to be useful, it must be current. If you give away an item, to the eventual recipient or otherwise, sell an item, or if an item is lost, stolen, or destroyed, such as by fire or flood, it’s time to amend your memorandum.
If you find yourself needing to make significant changes to your memorandum, one helpful approach is to photocopy the original, make notes on the photocopy about changes you’d like to make, then use the notes to produce a new, updated memorandum. It is important that the updated personal property memorandum include all of the specific items you want distributed to the named individuals. Once you’ve concluded this process, you can avoid any confusion by shredding the old memorandum— but of course, before shredding any estate planning document, check with a us.
Ask for help
If your personal property memorandum creates any challenges, such as an item or collection that’s difficult to describe, contact us. We’re here to help, and we can make sure your estate plan works just as you intend.
We hope these tips have been helpful. Your personal property memorandum can be an important document in the execution of your estate plan. But it must be detailed, accurate, up to date and mentioned in your will or trust to be effective.
As always, we’re here to provide personal, tailored advice as you create this essential document.
By Jeff Mangieri
This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.