WHY YOUR ESTATE PLANNING SHOULD INCLUDE SPECIFIC GIFTS OF MONEY AND PROPERTY
In addition to being a licensed California attorney for over 20 years, I am recognized as a legal specialist in the field of estate planning by the California State Bar. I have been advising clients how to make estate and trust distributions easier for their loved ones and I have discovered that you should consider adding specific instructions for your Executor and/or Trustee which includes a specific gift list of money and property.
Estate Planning does require you to design your legacy by making important decisions. You are not alone; you can hire a professional to assist you. Planning for your incapacity and your death does force you to face your own mortality. In my opinion, it is not morbid to think clearly about death because your survivors will benefit from the planning that you do. If you desire to make estate and trust distribution easier for your survivors who are facing the loss of a loved one and the challenges of grappling with legal and financial issues, you will need to do some estate planning. Upon your death your will and/or trust will distribute your assets which includes your personal property.
When signing their wills and trusts, a lot of clients ask me “What if I want to make specific gifts?” My answer is always “Yes, you can make specific gifts and I recommend it, but your list needs to be in writing.” A specific gift list is a list that identifies the gift item and the gift recipient. The legal requirements for creating a specific gift list are that the list must be (1) in writing; (2) signed by you; and (3) dated. You can type this specific gift list, but it must also be (1) printed, (2) signed by you; and (3) dated. Digital photos of the specific gifts are now being used in lieu of lengthy descriptions. This trend of taking photos is particularly helpful for firearms, jewelry, and art. A specific gift list directs the Executor and/or Trustee to deliver the gifts if the personal property items are still part of your estate upon your death. If the item cannot be found because you sold it; lost it; or you gifted it prior to your death, then the gift shall “lapse” which means that the gift goes away.
A specific gift list is recommended anytime there is more than one beneficiary. For example, I am married with three children. Upon my death, my husband will inherit all my personal property. Upon both of us to die, our trustee will be tasked with dividing all our personal property into equal shares for our three children. However, anything on a specific gift list does not need to be appraised and split into equal shares. For example, if I want my vehicle to be distributed to just one of the children, that beneficiary does not have to pay for the vehicle or buy-out the others.
If you own pets, you will also want to consider a specific gift list. In addition to listing the gift item and the gift recipient, most of my clients want to add a dollar amount to the gift of their pets. For example, I had a client whose dog already incurred veterinary bills in addition to basic grooming and food costs. She didn’t want her friend who had agreed to take care of her dog to go into debt, so she made sure there was a dollar amount given with the dog to her friend.
If you own more than one house or property, I recommend that you consider a specific gift list with instructions for a certified appraisal and an equal cash gift. One trust that I administered illustrates why this is a good idea: the Decedent had 2 houses when she died, one in Amador County and one in the Bay Area. The balance of the estate was to be divided fairly 50/50 between her two sons. Through her trust, she gifted one property to each son but failed to instruct the trustee regarding an appraisal and an equal cash gift. As a result, her sons did not receive a fair 50/50 split of her estate because the Bay Area property was worth significantly more than the Amador property. I petitioned the judge for instructions, but nothing could be done, there was no evidence that the Decedent intended a 50/50 split of the real property.
The problem with blended families is that we have his, her and our children and his, her and our stuff. A specific gift list helps the Trustee make the correct distributions of money and property to the intended heirs which avoids a lot of confusion and fighting.
A specific gift list allows the correct distributions to the intended heirs no matter who purchased the item. Did you know Costco can print a receipt of everything you have purchased with your membership? In one case, there was a court order for a list of items purchased at Costco, including a kitchen mat that was purchased for $16.99. The cohabitant who owned the real property but not all the stuff inside of the house didn’t understand why there was a court order for the return of the kitchen mat. The kitchen mat was dirty and had been used. Unfortunately, in this case the most cost-effective solution was to deliver the kitchen mat and advise the client to buy a new one. Not all items are easily replaceable so a specific gift list is recommended.
Attorney Gwendolyn K. Christeson founder of The Estate Planning Law Center located at 159 Main Street, Jackson, CA, 95642, assists clients with preparing their legal documents and assisting their loved ones with probate and trust administration. For more information about Gwendolyn and her law center, please visit teplc.com or www.facebook.com/teplc or call (209)223-7625.
