A story out of Shreveport, La., should serve as a lesson to Estate Trustees dealing with the administration of personal property. In 2009, Trisha McNeal bought a painting for $2.00 at a garage sale which appeared to the seller to be worthless, but had the word "Picasso" written on the back. The seller was a friend of the deceased art collector and not his Estate Trustee. Ms. McNeal contacted the FBI and they proceeded to investigate whether it was an original. There has been no update on the results of their investigation.
Often when it comes to dealing with the personal property of the deceased, the Will contains very broad language that provides that the Estate Trustee can sell the property, distribute it to the beneficiaries named in the Will, or can otherwise deal with it as they see fit.
This may lead the Estate Trustee to believe that they are free to do whatever they want with the personal property, for example by selling items off at a garage sale, or even throwing it away. However, Estate Trustees should be aware of the personal risks that they face when dealing with personal property in a haphazard manner. It will be very difficult to defend a claim of negligence where the Estate Trustee failed to have certain types of property appraised and instead threw it away or sold it for far less than it’s worth. In addition, some of the biggest battles in estate litigation are over items with no real market value, but ones to which family members attach significant emotional or sentimental value.
To start, an inventory of all of the personal property should be created. Anything that is potentially of value should be appraised by an independent and qualified appraiser – such as original pieces of artwork, antique furniture, coins, collections and jewelry. The inventory, along with the appraisals, should be provided to the beneficiaries so that they are aware of the items and their valuations.
Sometimes the Will refers to a memorandum which will deal with the distribution of personal property. See Paul Trudelle’s recent blog "Didn't Get the Memo?" on the topic of the enforceability of these memos. Basically, if the memo is created after the Will or the latest codicil was made, it will not be legally effective. If the Deceased does leave a legally ineffective memo, should it be followed nonetheless? The Estate Trustee in these circumstances would be wise to seek the consent of all interested parties before making any decisions in these circumstances.
Distribution Amongst the Beneficiaries
Distribution of the personal property should be done carefully to ensure that selection process is fair and the Estate Trustees do not appear to be giving more to one beneficiary over another. There should be some thought given to creating a mechanism for balancing amongst the beneficiaries, for example, if some beneficiaries would rather not receive any personal property and some choose to receive $10,000 worth of personal property, there may be some cash payments made to those who chose nothing. When items are selected and received, Estate Trustees should ask beneficiaries to sign a document acknowledging that they have received the items they selected.
Items of Sentimental Value
Sometimes there is only one of mom’s engagement ring and it is priceless to all of her children. How are the Estate Trustee’s supposed to deal with that situation? When an Estate Trustee is aware that there is going to be a fight over a particular item, it is worth trying to address that dispute in advance. Creative solutions could be explored, such as dividing the object into multiple pieces and turning them into other pieces of jewelry or art.
As estate litigators, we find that fights over these items are often the most difficult to resolve. Hopefully each of the beneficiaries can come away with an item that will be a cherished reminder to them of their loved one without a drawn out family battle.
Thanks for reading!