Don’t Sweat the Small Stuff? There’s No “Small Stuff” in a Will

Grandma’s mixing bowl. Grandpa’s fishing pole. We’ve all been told: “Don’t sweat the small stuff.” Isn’t this just “small stuff?” Wrong! According to Kansas attorney Tim O’Sullivan, when someone dies, the disposition of personal effects is the “second greatest risk to family harmony,” second only to choosing the right fiduciary. (“Why Family Harmony is a Frequent Casualty of Most Estate Plans,” The Journal of the Kansas Bar Association, Feb. 2020). Stories abound of heirs fighting mercilessly over how to divide nostalgic possessions like bowls and poles.

O’Sullivan’s article offers a treasure trove of advice about handling a decedent’s personal treasures. Here’s a “baker’s dozen” of the best tips:

1. Create a “Personal Effects List” with detailed instructions. My mother-in-law had quite a collection of family heirlooms with sentimental value. We’re grateful she left a detailed list to allocate them among Laurie and her three sisters. Unfortunately, in spite of good intentions, most never get around to preparing such a list. When you do make the list, be sure to update it periodically.
2. Send a copy of the list to your estate planning attorney and keep the original in a sealed envelope with your other original documents. Otherwise, such lists “sometimes have a habit of coincidentally ‘disappearing.’“ If more assurance is desired, the list can be formalized as a Codicil to a Will or as an Addendum to a Living Trust.
3. Even better than a list (or in addition to it), consider making a video of such items for identification purposes and tell the provenance and family heritage of such items in the audio portion of the video.
4. The executor should change the locks on the residence soon after death. If not, “a child may ‘jump the gun’ and employ ‘self-help’ by surreptitiously taking items from the parent’s residence.” O’Sullivan’s partner calls this the “pickup doctrine,” referring to the pickup truck that is commonly used in this “pick up” process.
5. Avoid an overly broad definition of tangible personal items that pass outright to your loved ones, limiting the definition to items of personal usage or those with sentimental value. “Big ticket” items, especially those with little emotional attachment (such as “cars, airplanes, and boats, as well as valuable paintings, artworks and collections”), are usually best distributed under the residuary clause.
6. Ask each child for a list of items they want, in order of preference, with the understanding that honoring such requests is not assured. Parents can take such preferences into account in preparing their Personal Effects List.
7. Create a distribution procedure for items not on the list. First, give the children 90 days to reach a division by agreement among themselves. Failing such agreement, or for the leftovers, consider one of the following procedures.
8. For undistributed items, one option is the “random sequential lottery method, with the sequence being reversed in each subsequent round having the same participants.” One by one, each participant selects one item. Make sure a minor child is represented by a trustee or guardian. If the parent desires financial equality, have an estate salesperson put a value on all such items, and any overall differential among the children in the value each received can be adjusted out of the children’s shares of the residuary estate.
9. Another option is distribution by auction, either public or (more likely) private. Consider giving each child an equal amount of “virtual money” to use in bidding on items. Bidding can either be an open process or done by sealed bids.
10. Appoint an independent fiduciary to make the division. Although “probably the most protective of family harmony, …independent financial fiduciaries would not be expected to welcome being burdened with this degree of discretion.” I describe this method as appointing a “King Solomon” to divide the personal effect “babies.”
11. Second marriages create especially delicate situations for children and a stepparent dividing the personal assets. If dad leaves his estate to his kids, the surviving stepmom may have a homestead right to reside in an empty house if the furniture in it went to his kids.
12. Clarify in the Will if the estate is expected to bear the cost of packing and shipping such items to the child. If silent, the child should be required to pick up the items within, say, 45 days or else either (i) the child would bear the cost of packing and shipping or (ii) the fiduciary can sell the items and distribute the proceeds to the child.
13. Authorize the executor to electronically duplicate family pictures, videos, letters, and personal records and disseminate among all heirs who want them, with costs borne by the estate.

There are no perfect solutions, but following O’Sullivan’s tips improves the odds of avoiding sibling warfare over that mixing bowl or fishing pole.

Marvin E. Blum