by Erin Callahan

Estate Planning, WillsMay 1, 20190 comments

What to do with the family heirlooms and keepsakes?

When most people think of estate planning, they think of assets that include money, real estate, and personal property. But, included in someone’s estate could be invaluable personal property, such as family heirlooms or keepsakes. This type of property should not be overlooked in your estate plan just because it may not have a high dollar value because it still has sentimental value that cannot be quantified. Part of a thorough estate plan is determining how you want these priceless family heirlooms and keepsakes distributed once you are gone. Personal property and family heirlooms specifically cause more family turmoil than larger assets worth more money.

Issues You May Face 

An “heirloom” is a particular piece of the personal property passed down from one generation to the next and will continue to be passed down for generations to come. Be sure to talk about the family heirlooms and keepsakes with your family so that feelings and expectations regarding these items are out in the open. Also think about having your heirlooms and keepsakes appraised, if possible, by someone reputable so you can provide your heirs with the necessary documentation, and so the items can be appropriately identified in your estate planning.

How to Distribute 

When it comes to family heirlooms and keepsakes, the typical division plans may not work.  If the item is of low dollar value, there may not be a way to equalize the distributions monetarily.  This can also be the case if the dollar value of the keepsake is incredibly high compared to the value of the remaining estate.  Furthermore, if there is only one of such an item, there is no way to split one thing between multiple people. Whether it’s great-grandfather’s WWI medals, the cherished family crystal, or your mother’s pearls, you will need to decide the best way to distribute these assets based on your unique family situation. Regardless of who receives these items, they are usually distributed by way of a personal property memorandum in those states that permit this practice. 

The personal property memorandum allows you to express your wishes and avoid the hard feelings that could come about by leaving all of the personal property equally to your children. This document is a written statement regarding the specific property; the document is then referenced in your last will or living trust and identifies who should inherit what property. This document also has the added benefit of being able to be modified or revised without the need to execute a new will or amend your trust. However, please remember, the personal property memo is not to be used in place of a will but instead as a helpful tool for the executor. Also, if you have mentioned a specific item in your will, you do not want to include that item in the memorandum.

Gifting During Life 

Because of the sentimental nature of family heirlooms, you may want to consider gifting these items during your lifetime instead of waiting until your death. If you gift your family heirlooms and keepsakes during your lifetime, there is personal joy in witnessing your loved one receiving the family treasure. That being said, be careful of gift tax issues that may be incurred depending on the value of the item.  Another concern that you may want to address depending upon the value of the family heirloom is whether or not this lifetime gift should be considered part of the recipient’s share of your eventual estate.

Estate Planning Advice 

A comprehensive estate plan that considers all assets – including family heirlooms and keepsakes – is key to making sure your wishes are followed once you are gone.