When estate planning attorneys begin the conversation about setting up a plan with a client, a great deal of the conversation is centered on what the client's goals are and how assets are to be divided. The bulk of the conversation regarding a client's assets involves the client's real property, bank accounts, and other investment accounts they might have. However, those assets are not the only ones that matter to the client and to their families.
Arkansas Code Annotated §28-25-107 allows for a written statement, which is signed, dated, and describes the personal property items and recipients with reasonable certainty, to be admissible as evidence of the intended disposition of personal property items, except for money, indebtedness, documents of title, securities, and property used in trade or business. This statute allows a person to specify who receives which personal property items without having to amend their will or trust.
It is important to have a conversation with your children or other beneficiaries about which items they specifically want to help limit any confusion or frustration at your passing. Some clients will want to make sure that everything is equal amongst their beneficiaries, so they will have an appraiser help make sure nothing is significantly more valuable than anything else to limit any fighting during an already trying time. Other clients prefer to gift certain items to their intended beneficiaries while they are living, ensuring that a certain beneficiary receives a certain item. In this instance, clients should be aware of the annual gift tax exclusion amount for 2023, which is $17,000 per person.
Another option some clients elect to utilize is to have their beneficiaries draw for an order and take turns picking items that each beneficiary wants. This allows for each beneficiary to have a say in what they receive, which can often lead to a peaceful outcome.
The previous options work best when beneficiaries get along; however, that is not always the case. An extreme approach that often occurs when the beneficiaries cannot figure out a plan for distribution requires the executor or trustee to sell all of the personal property and divide the proceeds. This option often leads to resentment and frustration among family members when this situation could have been avoided.
As with all estate planning, it is best to speak to a trusted estate planning attorney or adviser to devise a plan that works best for your family and your beneficiaries. A properly drafted plan can reduce problems or fighting within the family upon your death and can ensure that your personal property items get to your intended beneficiaries.
Wesley Harris is an associate attorney at Farrar & Williams, PLLC, a law firm limiting its practice to trusts, estate planning, and elder law, located at 1720 Higdon Ferry Road, Suite 202, Hot Springs, Arkansas, and can be reached at 501-525-4401 or by email at [email protected]. Wesley can answer any questions you have about this subject.