Sentimental Value

As the credits roll in the Clint Eastwood film, Gran Torino, the young man who befriended Clint’s character is seen driving the beloved Ford down a coastal road with the deceased protagonist’s dog by his side.  Because the car symbolized an unspoken love and respect, the scene is emotive – even for this Chevy guy (though I think the movie would have been even better if it had been entitled, "Bel Air").

Items of tangible personal property, such as a Ford Gran Torino, a Chevy Bel Air, or smaller things such as jewelry and knickknacks, can have extreme significance for loved ones.  Many clients often want to include specific gifts of tangible personal property to specific persons in their Estate Planning.  However, clients often are not ready to finalize their wishes with regard to tangible personal property when it is time to sign their Estate Plans.  Furthermore, clients frequently change their minds about such sentimental items and thus are hesitant to include specific provisions in their Wills or Trusts, thinking that it would require additional expense and effort to update such provisions.

To accommodate a frequent change-of-heart with regard to tangible personal property, many people create lists after signing their Wills or Trusts designating who receives what tangible item.  This practice was outlawed in California for many years for fear of fraud.  However, the practice was so popular that a few years ago the legislature enacted Probate Code  §6132 which allows the enforcement of designations of tangible personal property in lists created after a Will under limited circumstances.  First, the item must be tangible personal property, not cash or real estate.  Second, each item must have a value of $5,000 or less.  Third, the total value of all assets transferred in this manner must not exceed $25,000.

Although a similar Probate Code section does not exist for Trusts, many Trusts will include a paragraph allowing the distribution of tangible personal property by a separate writing.  I always include a provision in the Trusts that I draft that states if such a list cannot be incorporated by reference, the list shall act as an amendment.  California law allows the amendment or modification of a Revocable Trust by a writing signed by the Trust creator and thus such a list should suffice as a proper Trust amendment under the Probate Code.

By legalizing this method, clients can change their minds about distributions of personal property without having to amend their Wills or Trusts.  However, because of these strict conditions and because values of items can change over time, it is important to be cautious when applying this method as the strict, stagnant rules can inadvertently invalidate constantly updated lists of items with values in flux.  Even if a separate writing designating beneficiaries of tangible personal property violates the strict rules of California Probate Code §6132, the fact that a client took the time and effort to create such a list carries strong moral weight.

Because of the fact that such strict rules can be easily accidentally violated, I normally advise my clients to reserve this method only for small items of sentimental value and to be mindful that if they believe there may be a disagreement over who receives a specific item, it might nevertheless be best to include such a designation in the body of the Will or Trust itself.  Case in point: it appears that Clint Eastwood’s character included the gift of the Gran Torino in the body of his Will rather than in a separate writing created after the Will.