When creating an estate plan, people are often most concerned with passing on the “big things” like real estate, bank accounts, and vehicles. Yet these possessions often don’t have the most meaning.
Smaller items, like family heirlooms and keepsakes, which may not have a high dollar value, have more sentimental value for families. These personal possessions are often not specifically accounted for in wills, trusts, and other estate planning documents.
You should not overlook family heirlooms and keepsakes in your estate plan, as their distribution can become a source of intense conflict and strife.
Heirlooms & Keepsakes: Little Things with Big Value
Heirlooms and keepsakes are both prized for their sentimental value, but the way they are passed down differs slightly.
Heirlooms are passed down among family members for generations and often involve traditions. Keepsakes are given or kept specifically for sentimental or nostalgic reasons and may only get passed on once.
Although just about any personal possession could be considered an heirloom or keepsake, some of the most common examples of these items include the following:
Family documents (such as birth certificates, baptism records, and citizenship papers)
Collections (such as sports memorabilia, coins, stamps, and doll collections)
Issues Raised by Passing On Heirlooms & Keepsakes
Heirlooms and keepsakes are legally considered “non-titled personal property.” When there is no plan in place for the distribution of these items following the owner’s death, it can create conflict among family members.
In her book “Who Gets Grandma’s Yellow Pie Plate?” Professor Marlene S. Stum, an expert in family social science at the University of Minnesota, warns of the infighting that can occur when there’s no plan for who inherits these personal effects.
“What surprises many people is that often the transfer of non-titled personal property creates more challenges among family members than the transfer of titled property,” says Stum. “Research has shown that disputes over inheritance and property distribution are one of the major reasons for adult siblings to break off relationships with one another.”
Taking the time to plan the distribution of your heirlooms and keepsakes can help your family avoid this potential trouble.
Strategies For Peacefully Distributing Heirlooms & Keepsakes There is no one perfect way to distribute these items in your estate plan, but the goal should be to maintain harmony among your loved ones during an already emotional time. Clear communication is important to this process.
Speaking with your family members in advance can give you a clearer idea of their values associated with certain heirlooms and keepsakes. By discussing expectations regarding your possessions ahead of time, you will have a much better idea how to distribute these items with the least amount of conflict.
You should decide ahead of time if you want to have any of your heirlooms or keepsakes appraised. This provide your heirs with the necessary documentation to gauge the monetary value of these items, which can save them from extra work while they are mourning your death.
The way you distribute your heirlooms and keepsakes will depend on your situation and the items you pass on. Here are a few estate planning strategies to consider.
Gifting during your lifetime: You don’t have to wait until you die to pass on your heirlooms and keepsakes, and you may prefer to do so while you are still living. You can witness the joy your loved ones experience when they receive the gift and can explain why you want each person to have a particular item.
If your heirlooms and/or keepsakes have a high monetary value, you should keep gift tax issues in mind when you give them away. The IRS has a high annual gift tax exclusion ($16,000 in 2022) and an equally high lifetime exclusion ($12.06 million in 2022), so few people need to worry about such taxes. The lifetime exclusion amount will revert to its pre-2018 level of around $5 million per individual in 2026, so if you are considering gifting high-value possessions, you may want to do it sooner, rather than later. If you have possessions you want to give away that might trigger gift taxes, we can discuss what options you have.
Include items in your estate plan using a personal property memorandum: You should include heirlooms and keepsakes, as well as other items, in your estate plan by adding them to your will or trust. The best way to do this is by using what’s known as a personal property memorandum. A personal property memorandum is a separate document that is referenced in your will or living trust. The memorandum allows you to list which items you wish to leave to each individual and detail the reasons you are giving each item. In many states, if it’s properly incorporated into your will or trust, a personal property memorandum is a legally binding document. Unlike a will or trust, you can create and update your memorandum without a lawyer. You can change your memorandum as many times as you like, just make sure you sign and date it each time to ensure authenticity. Your memorandum can be as long or short as you like, which allows you to account for even the smallest or seemingly insignificant possessions. Most types of tangible personal property can be included in your memorandum, but you cannot list certain assets, including titled property, such as real estate and vehicles; assets with a beneficiary designation, such as life insurance, 401(k)s, and bank accounts; or intellectual property, such as works protected by a copyrights or trademark. If you are unsure if you should include a certain possession in your personal property memorandum, consult with us.
Although you don’t need a lawyer to create or modify your personal property memorandum, if you need any help or support with yours, we are there for you. You should always enlist a lawyer’s assistance if you’d like to create or update your will or trust.
Pass on the values & stories behind the possessions: You may want to consider making audio recordings to accompany your heirlooms and keepsakes. In this way, your loved ones not only get to hear your voice, but they will also be able to learn stories behind the possessions, as well as why you gave each person a particular item. Stories help connect you with future generations. Having a strong family narrative allows young people develop strong personal identities and boost their self-esteem. In the New York Times article, “The Stories that Bind Us,” author Bruce Feiler comments on this phenomenon: “The more children knew about their family’s history, the stronger their sense of control over their lives, the higher their self-esteem, and the more successfully they believed their families functioned.”
Don’t Let Anything Fall Through the Cracks If no one can find your heirlooms and keepsakes, they aren’t going to be passed down. You should create and maintain a comprehensive inventory of your assets, including heirlooms and keepsakes. When you work with us, you’ll get the tools to start the inventory and name the people you would like to receive them.
Keep The Peace After You Are Gone To ensure your heirlooms and keepsakes don’t create any unnecessary conflicts among your heirs, your estate plan should include all of your assets. We can give you the resources to ensure these important items are passed down to your loved ones in exactly the manner you want, without causing a family feud. Contact us today to learn more.
This article is a service of Jennifer Winegardner of Rayboun Winegardner, PLLC. We do not just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love. That's why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session.