In my humble collection there rests a 1992 Superman comic signed by the writer. Being a future lawyer, I advocated for Dad to sign up for a Shopping Network account and buy me that comic for $75 in 1992. A google search suggests it’s now worth $25. Plus, I opened the seal to read the darn thing so it’s probably worthless.
The point (other than I should have played sports) is that estates consist of more than the large and liquid property – real property, cash, investments, etc. Estates also contain articles of personal property and effects; our stuff.
Some stuff has monetary value – antiques, artwork, jewelry, etc. Other stuff may be more sentimental – something passed down over generations or that has a story behind it for someone. And, other stuff, is worthless.
In preparing your will, consider items that are of significant monetary or sentimental value because those items may cause disputes among beneficiaries if not adequately addressed.
Unless specifically gifted under a will or otherwise dealt with by memoranda, personal property forms part of the residue of the estate. Most wills provide that the residue is divided among beneficiaries. How do you divide up personal property like a grandfather clock short of selling it and allocating the proceeds; particularly, if one beneficiary has a more sentimental attachment to the clock than others.
A specific gift (e.g., “To my son, Henry, my comic book collection”) is the simplest solution. Another option: referencing a memorandum in your will, a separate document that sets out who gets what. It can be binding (i.e., your executor is obligated to ensure the person you identify gets the item) or non-binding (i.e., your executor can be guided but not under any obligation). Binding memoranda must meet certain legal requirements including being sufficiently identified in the will and in existence at the time of making the will.
It’s not practical or possible to list every article of personal property. So, it may be useful to consider some allocation mechanism for items not dealt with by specific gift or memoranda. Maybe the beneficiaries will agree but if they can’t agree maybe there should be a process for the executor to decide like a coin tosses or card drawing. Consider also how the value of a personal effects received by or allocated to a beneficiary should be accounted for or adjusted against the cash or liquid share to which that same beneficiary is to receive.
Estate disputes are not limited to large estates or expensive assets. Litigation or hard feelings can arise over the little stuff too – like who gets the grandfather clock or your superman comic book.
Adam Kowalsky is an associate at the law firm of Cobb & Jones LLP. For more articles, visit the library page at www.cobbjones.ca