07/27/2015 - Tangible Property Myths: Conclusion

3. I gave it to him so I get it back. It's very common for family members to try to reclaim gifts that they made to the deceased. Again, there is absolutely no legal basis for this. If you bought a TV for Dad and gave it to him, when he passes it goes under his will - not back to you because you gave it to him. If that's what he wants, it better be made clear in his will.

4. He told me I was to have it. This causes tremendous bad feeling. Mom tells Suzy that she will get the grand piano and puts nothing in her will. Imagine Suzy's chagrin when the piano is sold by the executor. Worse, Mom tells Suzy she gets the piano and 15 years later, forgetting that she already promised it to Suzy, she tells Kathy that she gets the piano. In any event, none of these oral promises are enforceable.

5. Get it out of the house so it won't be in the estate. You've heard the stories of the truck pulled up to the house the day before the funeral. Until the appointment of an executor or administrator, no one has any authority whatsoever to take possession of any of the decedent's belongings. And then the executor becomes the title holder and is bound to secure the items, have the items appraised, pay any tax due, and distribute them in accordance with the terms of the will or the intestacy statute.

6. Tell the appraiser it's for "estate purposes." We all know that appraising is not an exact science and that most appraisers will give a range of value. Of course, if you have to pay an excise tax on value you want to use a value in the low end of the range. Fine. But "for estate purposes" should not be used as code for appraise at 50% or 25% of actual value. It's not only taxes that are affected by the appraisal; it's also how the property is divided among beneficiaries and equalization of shares.

7. I already gave everything to my kids. Some folks claim that they gave all their jewelry, artwork, and furniture to the kids, it's just "staying in the house for me to use." Sorry, that won't work. Even if you really did intend to make gifts of these items and if you have retained the use of them, the full value of the property is included in your estate and subject to estate and inheritance taxes.

No method for distributing tangible personal property is right for all families. Discuss with your family how items should be distributed. Talk to your kids individually and in private; talk to them in a group. Address the "touchy" issues now. Discussions that are slightly awkward or uncomfortable now can prevent family disintegration later.

Have a great week!

Patti