Legendary Comedians, Estate Battles and Your Stuff
The late George Carlin is one of my favorite comedians of all-time. One of his legendary routines revolves around how the meaning of life is basically finding “a place for all your stuff!”
More recently, Jerry Seinfeld riffed on how we have “too many things” and that it’s all simply in different states of becoming garbage. (Seinfeld remembers Carlin in a NY Times Op-Ed — “Carlin already did it.“).
The stuff and things that Carlin and Seinfeld lampoon are — in estate parlance — our “tangible personal property.” This is the stuff that you can touch, move or trip over. Valuables like jewelry, collectibles, autos and furniture, as well as the things that have little or no apparent marketable value, such as clothing and photos.
While tangible personal property provided brilliant comedic fodder for Carlin and Seinfeld, unfortunately for the family of late legendary comic Robin Williams, the distribution of his stuff has proved to be no laughing matter.
When Williams tragically died last August, there were some news stories about his estate plan, but from all accounts Williams had given his family the gift of a well-considered estate plan and it soon left the news. We learned that he had provided for his third wife and also had set up trusts for the benefit of his children from prior marriages. We didn’t know all of the details of the trusts, but that’s really by intelligent design — trusts are intended to be carried out privately without public court proceedings.
Unfortunately though, the apparent tranquility didn’t last and we recently learned that his children and his surviving spouse, Susan Williams, were fighting over his stuff. Susan recently asked for court intervention claiming that the language disposing of certain jewelry and memorabilia was ambiguous. Earlier this month I wrote in-depth about a recent Illinois case involving an alleged ambiguity, so I’m not going to get into that analysis here (a Forbes article contends that it’s not ambiguous), but what we often see is that ambiguity is in the eye of the beholder. Or, put another way, if family wants to find a reason to fight, they will usually find a way (read Slate’s insightful take on this here).
Clients sometimes minimize the importance of planning for their stuff — “it’s not worth much” and/or “my kids won’t care.” But oftentimes it’s not about what it’s worth, it’s about what it means — not now, but after a parent or spouse’s death. And while equally dividing a bank account or mutual funds is (sometimes) easy, nobody wants half of a watch or a third of a portrait or a quarter of a complete collection.
Last year I wrote about 10 Estate Planning Steps to Avoid Family Inheritance Disputes (see #6 re: personal effects). Here are 5 points on dealing with your stuff:
1. Create an estate plan. Intestacy law provides zero guidance for dividing tangible personal property. Even if you’re happy with the Illinois intestacy distribution, are not concerned with who will administer your estate and don’t mind that the court-appointed administrator will have to purchase a surety bond, what about dividing your stuff? Informal direction, either verbal or written — without a properly executed will or trust — will not be effective.
2. Consider having a conversation. You may benefit from discussing what’s important to you and your loved ones. Certainly not everyone is comfortable having this conversation, although you may find it more comforting and helpful than you think. Be careful with making unwritten promises though. I’ve seen numerous situations of “but mom always wanted me to get the ring” or “dad promised me the stamp collection,” but nothing was in writing (see #3 below) and needless fighting ensued.
3. Write both general and specific direction. There should always be some general direction or process with respect to tangible personal property. It might be as simple as “divide equally among my children as they agree,” but it should be addressed and not left for the catch-all residuary clause. Many clients also like to be given the ability to leave certain items to certain individuals via a separate written “memorandum.” This works best in conjunction with a trust, and gives you the ability to change and update the memorandum from time to time without a formal attorney-prepared amendment. If you’ve had the conversation and made promises, this is where you memorialize that.
4. Consider a time limit. If you’ve allowed beneficiaries to divide by agreement, consider a reasonable time limit after which the property will be sold. This can act as an incentive to reach agreement.
5. Don’t be hasty after death. Sometimes disagreements among even well-intentioned beneficiaries arise because they start “dividing” too quickly. You know the situation: everyone has keys, items are “missing” and no one is sure exactly what there was or who took what. It can be difficult to put that genie back in the bottle. The first step is for the trustee or executor to secure and then inventory the things. Once that’s done, then a process can be agreed upon in accordance with the estate plan.
Even if you don’t have the kind of stuff that Robin Williams had, it still likely matters to someone. Your estate plan should address how to get your stuff from your house to your beneficiaries’ houses, without creating a house divided.
Image courtesy of Flickr/Loren Javier