SFGATE recently reported that there is a dispute over the distribution of late actor Robin Williams’ estate. His children contend that his estate plan leaves all of his assets to them. His wife by a later marriage insists that certain items of tangible personal property were intended for her to keep. The items in question include the tuxedo he was wearing when they were married, their wedding presents, family photos, and memorabilia including some awards. Both sides are currently working on trying to resolve the disagreement outside of court. The episode illustrates the ambiguity that can arise with respect to the distribution of tangible personal property.
“Real property” is land and anything growing on, attached to, or erected on it. This includes houses, buildings, farms, etc. “Non-tangible personal property” includes bank accounts, investment accounts, stocks, bonds, and businesses. “Tangible personal property” includes movable physical items such as jewelry, artwork, knickknacks, and clothing – including tuxedos.
Most estate plans focus on real property and non-tangible personal property. Such assets are often either re-titled to a revocable living trust or name a trust or a specific person or organization as the designated beneficiary. Tangible personal property often does not have title and is thus not typically thought of as being trust property.
However most estate plans transfer tangible personal property to a trust, either by a general assignment of personal property (i.e., a document that states all personal property – including tangible personal property – is transferred to the trust), or by a “pour-over will” which states that any assets that were not transferred to the trust during the trust-maker’s lifetime will be transferred to the trust upon death.
When Robin Williams created his trust and presumably left everything to his children, was he thinking about his tangible personal property? Did he contemplate that “everything” would include the wedding gifts he and his spouse received and the tuxedo he wore at the wedding? This is likely the key question at the heart of the impasse between his children and his wife.
If Williams had intended to allow his wife to keep certain items of tangible personal property, he could have included clauses in his trust that distributed those items to her before the rest of his trust estate was distributed to his children. Some clients feel that including such clauses in the body of the trust is overwhelming, especially after spending so much time making decisions on “big picture” issues when designing their estate plan. Furthermore, they fear that they might change their minds about certain items and worry about the effort and expense of executing a formal amendment each time they have a change of heart. Such clients prefer to handle the distribution of tangible personal property by a separate writing executed sometime after the trust is established.
Although the law allows for the distribution of tangible personal property by a separate writing executed after the date of the trust, there are many technical rules for such a document to be legally effective. Unknowingly violating these technical rules could accidentally void the separate writing, thereby frustrating the intent of the trust-maker. A comprehensive trust should specifically allow for the distribution of tangible personal property by separate writing. Furthermore, since the terms of a trust control how a trust can be properly amended and thus legally enforceable, a comprehensive trust will also state that any separate writing purporting to distribute items of tangible personal property that is signed and dated shall be an effective amendment to the trust.
Although there are often articles in the news about disputes over items of tangible personal property, it is likely that in the vast majority of circumstances, the distribution of tangible personal property after the death of a loved one is handled fairly and efficiently. However, it is worth contemplating whether there are certain sentimental items that should be specifically addressed within the estate plan.
KRASA LAW is located at 704-D Forest Avenue, Pacific Grove, California, and Kyle may be reached at 831-920-0205831-920-0205.
Disclaimer: This article is for general information only. Reading this article does not establish an attorney/client relationship. Before acting on any of the information presented in this article, you should consult with a competent attorney who is licensed to practice law in your community.