In this video, Attorney Thomas B. Burton discusses How to Divide Tangible Personal Property in Your Will. Attorney Burton explains how tangible personal property is treated under the law for estate administration purposes and discusses a special list you can use under Wisconsin law in conjunction with your Will or Trust to ensure your items of tangible personal property get to the heirs you desire after your are gone.
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Welcome back!
I'm Attorney Thomas Burton and today's topic is "How to divide tangible personal property in your will or estate plan."
So tangible personal property is items you possess and own but do not have a separate title. So it doesn't include real estate because real estate has a deed that traces title and it doesn't include intellectual property like artwork, a song, music you may create, things like that but it's commonly referred to as chattel or goods. The Department of Revenue in Wisconsin defines it as the following - Tangible personal property is personal property that can be seen, weighed, measured, felt or touched or that is in any other manner perceptible to the senses. Examples include clothing, computers, office equipment etc.
Now in the estate planning example, I'll often show my coffee mug or a pen, this tie, this sport coat, all those are examples of tangible personal property. It's something I possess because I bought it and I own it but I don't have a title to it, like I might have for car has a title, for example in Wisconsin or again real estate is not tangible personal property.
So when you think about what's tangible personal property, in my estate, it's a lot of stuff that's inside your home, your garage and your sheds that you possess as ownership and looking behind me these printers are tangible personal property, that painting, so there's lots of things we have that are tangible personal property and many times, in estate planning, that tangible personal property actually does have value and it's important to many people because it can include things like antiques, jewelry, furniture, photographs, books, works of art, silver coins, stamps, things like that and those things can have quite a bit of value and even if they don't have value, they can have, I should say don't have a high monetary value, they can have high sentimental value. So when we're thinking about tangible personal property, that's what we're talking about. Again, it would not include things like cash, stocks, bonds, bank accounts, IOUs promissory notes because all those things are in an account, you have title to them and you also can leave them via beneficiary designation.
But how to dispose of tangible personal property in your will or estate plan is a big question I get because we want to avoid disagreements and fights over that tangible personal property after you're gone and sometimes I hear of people who use what I call the sticky note method which is they put a sticky note on the back of a photo or the china set or items and it lists the name of the child or relative who's supposed to get the item and while that method can work it, isn't legally a method to leave tangible personal property, so you're leaving it hoping people follow those notes and unfortunately I've heard of situations where someone passes and then one of the children goes in and moves the notes around to get the item they wanted. So I don't suggest you use the sticky note method. In addition, depending how long you put them on, they could fall off. So I sometimes joke, if you're going to use the sticky note method you better pay for the 3m or the extra good sticky notes and hope they last.
So what's our alternative to disposing of the tangible personal property? What I like to use in Wisconsin is a tangible personal property list and that is authorized by 853.32 here, in the Wisconsin statutes. This is a relatively new law that came about in 1995-1996, Wisconsin's New Personal Property Memorandum Law and what it allows is, in your will, you can reference a separate list on which you list those items of tangible personal property and here's what it says in 853.32 Sub 2 Sub A Sub 1 - A reference in a will to another document that lists tangible personal property not otherwise specifically disposed of in the will, disposes of that property if the other document describes the property and distributes with reasonable certainty and is signed and dated by the decedent. The decedent is the person who passes away. So why, in order to use a tangible personal property list, you need to make specific reference to it in your will or your trust but now under Wisconsin law, it's legally valid and why I like to use it for clients is I'm able to put a great flexible estate plan in place and then give them the list that they can add to in the future or delete, but if they get a new item, they could add it to the list and they don't have to pay the lawyer to amend their will or trust at that point because I often am hesitant to write in lots of items of tangible personal property, unless they have a high value, let's say over $10,000 per item like if you had a really expensive painting, you might want to put it right in the estate plan but for smaller items which have more sentimental value, the list is a nice way to say who you promised the item to and who you want to get it and then your personal representative under your will or your trustee under your trust can follow the list and honor your wishes and here's an example of what the list looks like, this is my own example, using an example of a trust but you basically have the name of the person, the item and then down here, you must sign and date in order to be valid under law. So this allows my clients to fill it in, in writing, in pen and again, it's a very flexible list, it doesn't require even typing. You can just use your pen and you can write my 'White China Set' to my daughter and you list her name Jane L. Smith, reasonable certainty, the white china set you know describe it the way your heirs would think of it and then you sign in with the date at the bottom. It can also work for things like guns, antiques, paintings, lots of items that have value and you may have like I said, promised it to one person and this is a great way to make it clear.
So under Wisconsin statute 853.32, you can reference this list in your will, under the law and similarly, we can do it under a trust. So if you're using a will planning, just make sure working with your attorney that you have specific reference to the document in order to use it. You can't just have an old will that doesn't reference this list, it needs to reference it by specific incorporation. So if you have a will predating '95-'96, it's unlikely you would have that because the statute didn't exist but if you're creating a new will, talk to your attorney about referencing this list, so that you can use it in this manner and as a bonus, I suggest if you have significant personal property, you consider using a trust to avoid probate on all that property because remember with a will, you can specify who will get the item but all that tangible personal property by law must flow through the probate court and they will assess a fee, based on the value of that tangible personal property and in my experience, I often find that to be one of the biggest time consuming tasks for your heirs to deal with, is trying to catalog and assign a value to all the tangible personal property that fills your home your garage and your shed.
So consider using a tangible personal property list in your will or trust, to ease the administration of Estate and make things as simple and straightforward as possible for your heirs.
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