How is My Personal Property Handled in a Trust?

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Learn How Personal Property is Handled in a Trust

Personal property such as jewelry, antiques, artwork, family heirlooms, and household effects can be passed on to your beneficiaries through a specific bequest: “I leave my Ming Vase to my sister Betty.” But for most people, it would be overwhelming to try to inventory and choose a beneficiary for every last item you own. Instead, it is common to use a separate “Personal Property Memorandum” that is attached to, and incorporated by reference into the trust.

Learn About Personal Property Memorandum

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. The memo is generally a handwritten or typed list of your wishes of bequests to family or charities, which is signed and dated by you. They can cover each personal item that you own, but typically include only those items of financial value or of strong sentimental value—the types of things that lead to disagreements among the heirs. For more detailed information on how to create a trust and distribute personal property, read this article.

The benefit of a memo is that it can be easily changed if you sell something, give it away during life, or change your mind about who should receive it after you’re gone. You simply throw it away and replace it with a new memo. Each personal property memorandum should be dated, and the trust should contain instructions that if more than one memo is discovered after your death, the one with the most recent date is binding.

Of course, you should also provide for personal property that is not specifically listed on the personal property memorandum. Most trusts will state that the trustee can dispose of it equitably to the beneficiaries, and if they can’t agree on the disposition, the trustee can sell the items and split the proceeds of the sale according to the trust distribution plan.