What Is a Personal Property Estate Memorandum in an Estate Plan?
If you’ve just started your estate planning in Huntsville, AL, then you know there’s a lot that goes into it—especially when it comes to writing out wills and trusts.
Suppose you’re like most people that have accumulated valuable assets throughout your life. In that case, you know how important it is to ensure that those assets end up in the right hands once you’ve passed on.
However, many people tend to overlook the smaller assets—as in the little things with sentimental value. For example, a piece of jewelry or a collection of autographed photos from your favorite entertainers. While these things are often written into wills and trusts, they’re just as quickly forgotten.
That’s where a personal property estate memorandum comes in handy. These documents allow you to list the loved ones you want to receive certain belongings of yours, whether they have sentimental meaning or not.
This article will discuss personal property estate memorandums and everything you need to know about them.
Read on to learn more.
What Exactly Is a Personal Property Estate Memorandum?
A personal property memorandum (memo for short) is a simple document that allows you to make a list of your personal property. For example, tangible personal property may include clothing, pieces of art, jewelry, etc., and who you’d like those items to be distributed to after you’ve passed on.
A personal property memo is a document that remains separate from your last will and testament or living trust. Unlike a will or an irrevocable trust, your personal property memo can be amended as many times as you want.
All you have to do is make sure your will or trust states that the memorandum exists and is an accompanying document to both in your files. From there, it may be recognized by your personal representative or executor (which we’ll talk about later in this article).
What Are the Benefits of Having One?
You’re probably wondering, what’s the point of having a personal property estate memo when I have a will and a trust?
Arguably, the most significant benefit to having this memo attached to your will is that it’s much easier to draw up, maintain, and modify repeatedly.
You can write whichever items you’d like into your last will and testament or a designated trust. However, suppose you acquire new items or end up relinquishing ownership of one or more items. In that case, you’ll find that adjusting your will or trust becomes expensive and time-consuming.
For example, there are attorney fees and other costs you’ll need to pay each time you make an adjustment. Not to mention, you’ll need to go through gathering witnesses and the re-signing of your will, a codicil, trust, or trust amendment each time.
Overall, it’s a long and drawn-out process that’s just not worth it if you have smaller possessions that you want to distribute among family members.
As mentioned earlier, personal property memos can be changed at will. Additionally, having a personal property memo can minimize any conflict among family members regarding who gets to keep which sentimental items after you’ve passed.
What Can I Include in My Personal Property Estate Memorandum?
In Huntsville, Alabama, a personal property estate memorandum is typically used for your tangible assets. This would include items such as:
Jewelry
Clothing
Furniture
Pieces of art
Collectibles
Vehicles
Dinnerware, silverware, and other kitchen items
Tools
Family photo albums
Essentially, any small items you want to distribute among your family members can be included in your personal property memo. For example, suppose one of your children has a favorite coffee mug of yours or a set of fountain pens. In that case, you can use your memo to ensure the right sentimental items go to the right people.
However, not just anything can be added to your personal property memo. For example, you cannot add any real estate to the list or other forms of intangible property such as:
Money (this includes bank accounts)
IOUs
Copyrights or any other intellectual property
Stocks, bonds, IRAs, or other retirement accounts
Business properties
The big-ticket items may need to go through your last will and testament or an established trust. Otherwise, they’ll be passed down through the state’s inheritance laws through the Alabama probate court.
How Can I Use a Personal Property Memorandum With My Will?
In most states, an informal personal property estate memorandum is a legally binding document—as long as it’s written into your last will and testament. However, it’s also necessary to note that your last will and testament MUST be valid—as in signed among witnesses, a notary, and reviewed by an Alabama estate planning attorney.
The personal property memo can be handwritten or typed and printed, as long as it contains your handwritten signature and the date. However, there must be a declaration in your will that indicates this addition to your will or trusts.
Additionally, your personal property memo should always begin with an opening statement, such as:
“I hereby bequeath/leave the following items of my tangible personal property to the beneficiaries/family members listed below….”
Afterward, you would list the personal items in addition to the names of whom they’ll belong to next. From there, all you need to do is sign and date the memo and keep the document somewhere safe with your will so that your executor will be able to find it when the time comes.
There are also a few things you should keep in mind when writing your personal property memo, such as:
If you’ve already written a particular item into your will, you cannot include it in your personal property memo as it will cause a contradiction, and the will shall override
Describe the items as clearly and concisely as possible, especially if there are multiples of the same things or there are similar items that can be easily confused with one another
Always include contact information—like the address and phone number— of each beneficiary on the list. This way, if your executor doesn’t know who they are, they’ll at least have a way to quickly get in touch with the beneficiary. It’s also a good idea to include a short description of each beneficiary’s relationship with you
Don’t forget—it should also be noted in your estate planning documents that this instrument exists and where it can be found. Otherwise, it may not be effective. Those items may be at risk for unequal distribution or left to arguing family members.
How Do Personal Property Memorandums Work in Alabama?
The legalities of personal property estate memorandums are determined by the state. Additionally, each state governs how the personal property memo should be worded to be recognized as a legally binding document.
Alabama, for example, is listed as one of the states that don’t recognize these personal property memos as legitimate legal documents on their own. That means your personal property memo won’t be formally addressed in probate court since it doesn’t require any witnesses or a notary.
However, the state does allow tangible personal property memos by “incorporation by reference.”
In other words, according to Alabama Code section 43-8-139:
“Any writing in existence when a will is executed may be incorporated by reference if the language of the will manifests its intent and describes the writing sufficiently to permit its identification..”
Suppose your personal property memo is written out clearly and is also declared in your valid last will. In that case, the Alabama probate courts may recognize it as a legally binding document. As long as it includes only the tangible items from your estate as listed earlier.
There are many things to cover regarding your estate planning and writing out wills and trusts. However, suppose you notice that you’ve left out the little things that may mean something to someone else. In that case, you can quickly draft a personal property estate memorandum so that it can be distributed to your loved ones with ease.
Of course, even something as simple as a property memo can raise some uncertainty regarding its legalities and how it should be worded. If you have any doubts, contact us today to consult with Sarah S. Shepard or another experienced Huntsville trusts and estates attorney. Together, we can make sure your estate plan is well-defined and legally effective.