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How to spare your heirs a battle over your estate

Dividing money is easy. But who gets Mom’s tea set?

Published: April 2014

How do you split a painting in half? That’s the problem confronting a client of Bernard Krooks, an estate lawyer in White Plains, N.Y. Before his client’s mother died, she specified that her two sons each get half of her financial assets—but she didn’t make provisions for her personal possessions, and there was one piece of art that both wanted. “One son went to the house and snatched it,” Krooks said. “The executor was willing to give the other son the cash equivalent of the painting’s value, but he said, no, he wanted the painting.” The quarrel escalated, and lawyers were called in. Since then, Krooks says, the legal fees have far exceeded the value of the painting and the brothers no longer talk to each other.

“The biggest estate-planning mistake is that people think it’s only about the money,” said Marlene Stum, a professor at the University of Minnesota and author of the “Who Gets Grandma’s Yellow Pie Plate?” workbook and website. “When it comes to their personal possessions, they say, ‘It’s just stuff.’ ”

In fact, such “stuff”—the legal term is “non-titled property”—is often the biggest source of unhappiness among families, says Wynne Whitman, an attorney in Spring Lake, N.J. Certain items might have monetary worth, and others are cherished for their sentimental value. But that 25 cent Christmas ornament or dog-eared copy of “Winnie the Pooh” can come at a costly emotional price. Without investing time and thought into how to distribute personal possessions, you can unwittingly leave a legacy of rancor and resentment.

A will isn’t enough

In one survey by Rocket Lawyer, a legal-­services website, half of respondents with children did not have a will. Also alarming, 41 percent of baby boomers (ages 55 to 64) did not have one.

Dying without a will calls into play intestacy laws, which means the state determines how a person’s estate is distributed and how the ­assets are allocated. In other words, if you don’t make a will, the state effectively does it for you. In most states, the estate is ­divided among the decedent’s spouse and children. But with the increasing number of blended families, things can get complicated. So if you want your china or woodworking tools to go to a particular child, it’s best to put it in writing.

Many states let you attach a codicil to your will indicating that you’ve made a separate list distributing your possessions. “Keep it separate from your will,” Stum said. “You can change your mind, and you don’t want to have to update your will every time.” But it’s a good idea to check with your lawyer when you do want to make changes to the list.

Use our advice to create a bullet-proof estate plan

Before you make the list

A common mistake in passing on possessions is making assumptions about who wants what but neglecting to articulate them. A woman in New York inherited a treasured 18th-­century Spode platter from her grandmother, but what she really wanted was her set of chipped earthenware mixing bowls—which her grandmother had tossed out. “I was incredulous when she said, ‘Oh, I got rid of that junk,’ ” the woman said. “The Spode may be worth more money, but the fact that we made cookies together in those bowls makes them more valuable.” Meanwhile, the woman’s mother was miffed that her daughter wasn’t properly grateful.

Baby boomers surveyed by Allianz Life Insurance Company selected personal possessions six times more often than financial inheritance as important in legacy planning. “We aren’t good at guessing what’s going to be meaningful,” Stum says. One solution: Send out a statement saying: “I want to know which of my items have meaning to you. I’m not making guarantees about who gets what, but I’d like to know.”

Keep a list to ensure that your responses are consistent. “The heartache is people having ­expectations that aren’t going to be met,” Whitman said.

Starting the process early leaves time to work out ground rules and deal with different assumptions and opinions. And it can be a chance to see the pleasure your treasures can bring to their new owners.

Distribution methods

The “Who Gets Grandma’s Yellow Pie Plate?” website lists a variety of options for distributing your stuff. No matter which you choose, make sure that the process is transparent so that everyone knows that the rules are being followed and that everyone gets a voice.

Here are some methods that work.

  • Love it and list it. Ask the kids to itemize 10 things each wants with sentimental value and 10 things with a monetary value. Share everyone's list. If two siblings want the same item, let them negotiate. They can trade or give up something or, if feasible, split the item between them.
  • Designate dots. Give each family member a sheet of adhesive dots or Post-it notes, with a color assigned to each relative. Ask them to place a dot on what they want.
  • Auction it off. Family members can bid on items using “funny money,” such as poker chips or Monopoly bills. Everyone starts off with an equal amount.
  • Roll dice or draw straws. Family members roll dice, with the winner of the first roll receiving first choice, the winner of the second roll receiving second choice, and so on. After the first round, the selection order is reversed. After two rounds, family members roll again to start a new order. Alternatively, draw straws to determine order of choice.
  • Play birth-order bingo. Select according to birth order, either going from oldest to youngest or vice versa.

Conflict resolution

Even if your kids get along—but especially if they don’t—determine a process for ­resolving conflicts and specify it in your will or trust.

Julie Garber, J.D., a senior trust officer in Naples, Fla., who writes about wills and ­estate planning at About.com, recalls a client whose son and daughter often quarreled. The mother had a professional appraiser value the big-ticket personal items, wrote a name next to each item, then stated in her trust that anything that wasn’t on the list would go to the daughter. “No one could argue because the list was in her own writing,” Garber said.

Another option is to assign an independent third party as the executor. A mediator (search the Internet for “mediation services”) experienced in family disputes is preferable, but your accountant, lawyer, or even a family friend will do. “Leave a clause in the will saying, ‘If my kids are unable to agree after 30 or 60 days, then Mr. X is the final arbiter,’ ” Krooks said. “The kids have the opportunity to work it out, but they know that if one gets in the way of a fair settlement, someone has the authority to say who gets what.”

A thoughtful distribution of your “stuff” is a gift more valuable than any item. After all, says Debra Speyer, an estate lawyer in Philadelphia and Miami, “The last thing you want when you die is to put your family in a worse situation.”  

Editor's Note: This article appeared in the May 2014 issue of Consumer Reports Money Adviser.
   

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