Write it down. For decades, law firms like Fleming & Curti have provided estate planning clients with blank forms for making lists for gifts of personal property.
Clients rarely use them, but there are significant benefits to making lists. Lists give your executor (a/k/a personal representative) or trustee a roadmap for distributing the items. In addition, they show the recipients you care about them.
Arizona, like many other states has a law (A.R.S. 14-2513) that allows for making lists. The statute provides that a “written statement or list” referenced in a Will or Trust is to be treated as part of your Will or Trust if it is in your handwriting OR signed by you. There’s nothing special about the blank forms we provide. You can make lists however you choose. Typed up on your computer (as long as you print and sign it) or written out longhand on the back of an old Wells Fargo bank statement (as long as it’s clear you intend the list to be gifts).
Some people like to attach tags or Post-It notes to items. This can present problems. Tags and especially Post-Its can fall off, and adhesive can cause damage to finishes. In addition, a loved one could dispute that the method is not a “statement or list.” If you tag, consider making lists of the items as well, and make sure the tags and list match!
Making Lists Increases Efficiency
Physical items that remind us of our past and the people we loved can rouse a lot of emotion. When administering estates and trusts, we have found that arguments can involve items of the smallest values (rock collections, sports jerseys, costume jewelry). Heirs have argued that the should receive an item because they gave it to the decedent as a gift. Or that their father “always intended” for their son to get the item when he died. An executor can opt to honor requests, but having clear direction from the testator is always better.
None of us should be surprised that the little things can mean a lot. It’s true in my own life. My grandmother used such a list to gift me a set of “Birds of America” dishes after her death. The dishes are mismatched and have little value (I’ve researched). But every Thanksgiving, when my daughter sets the table with Nana’s “bird dishes,” my whole family is reminded of her special role in my life. More than two decades after her death, an item she loved reminds us that she loved us.
Making lists is not always easy. But it can let someone (like a granddaughter or friend) know that you thought of them and wanted to acknowledge their importance by making a specific gift. This is especially true if a special someone is not included in the “main” estate disposition. Specific gifts can be more meaningful than a “round robin” style selection process.
What to Include?
What sort of things should you include? “Tangible personal property” means items that can be picked up and moved around. All of your “stuff.” It includes pets, vehicles, artwork, jewelry, furniture, books, personal mementos and collections of any kind. It does NOT include intangible items such as bank accounts, stocks, patents, trademarks, or real estate – none of which are “tangible.” If you have digital assets, they are not tangible and technically may not be given away by making lists. Many are governed by an account’s terms of service. If you want to gift such an asset, you should check the rules. If you have any questions about what can be included on your list, check with your attorney.
The statute requires that the list “describe the items and the devisees with reasonable certainty.” Give a good description of the items and specifically name the person. If you have multiple generations with similar names, be sure you specify. Refrain from nicknames. Consider naming alternates, someone to receive the item if the primary recipient is no longer living or chooses not to accept the gift. And of course the list should be legible. (Please!)
Hear more tips on organizing your items in this podcast.
Share Your Lists
After you’ve gone to the trouble of making lists, it’s a good idea to share them (and any updates) with your nominated executor so they know it exists. You also may want to send your lists to your estate planning attorney so your file is complete. Revisit your lists from time to time to delete items you no longer own, swap out people who are no longer in your life, and add new items and new people (like grandchildren). The statute specifically allows lists to be “altered by the testator after its preparation.” So you can cross out and write in new people, but that’s not the best idea. To avoid confusion, we recommend updating the list in its entirety.
Also: Make sure you include a date on any list and changes. If you do more than one list and items are duplicated, the most recent one rules. If there’s any question about capacity, dates can be crucial.
What About Items Not Listed?
Then there’s the question of what happens to items you do not include on any list — the remainder. In your will or trust, you can provide direction about how these items are to be divvied up. Carefully think about what you have and whether the process you have provided is worth the time and effort. Allowing each child to choose, for instance, can be cumbersome if people don’t live nearby. Tricky questions can arise, such as does your estate pay for travel? If you require “equal shares,” determining each item’s value can be time-consuming and expensive. If you want an efficient estate administration, consider giving your executor the discretion to determine where the rest of it goes, even if that means straight to charity — or the dump. You can take care of the items you really care about by making lists.