If you have a beloved late grandmother, many images and memories may come to mind when you reminisce about her.
You might picture her at her home or at the family vacation house during the holidays. Your memory could be a special meal that only she prepared for you or a place she took you to. Or maybe you remember a piece of jewelry she always wore—one that several family members are eyeing as you go through the personal property in her estate.
The little things in life can sometimes hold both sentimental and financial value. Personal items of the deceased can often create controversy when it is time to divide up belongings, and there is no clear plan for who gets what.
Discussions about who gets the car, the house, the silver, the stocks, and other significant assets take center stage in an estate plan, as people often spend a great deal of time deciding how their most important assets will be divided among their loved ones. However, small items can cause significant disputes between family members, especially when more than one person wants the same thing and it is not explicitly accounted for in an estate plan. (I recall the controversy surrounding a family heirloom lamp that was in the home where the person lived and died, and which was removed and packed up without the homeowner's permission by their sister.) It can be as simple as a lamp that can lead to hard feelings.)
Jewelry is a perfect example of something physically small but potentially worth more emotionally and monetarily than any other property or account in someone’s possession. By the age of 50, many women own upwards of 150 pieces of jewelry. The likelihood of someone dying and leaving behind jewelry is therefore relatively high.
Yet while people usually remember the stories behind certain pieces, they may not know how much money their jewelry collection is worth. Take, for example, a British woman who received an appraisal of a diamond ring she had purchased for $13 decades earlier at the UK equivalent of a yard sale, assuming it was costume jewelry. She learned that it had an estimated value between $325,000 and $450,000. The ring was later sold at auction for around $850,000.
Stories like these are more common than one might imagine. To prevent future conflict among loved ones, jewelry owners would be wise to inventory the value of key pieces in their jewelry collection and leave clear, legally binding instructions on how the collection is to be divided.
Items of personal property like heirlooms and jewelry, although individually small, can collectively make up a large part of a deceased person’s property. They may be treated as an afterthought and lumped together in a will or trust, with their distribution being addressed through a residuary clause or a remainder clause.
A residuary clause might state that whatever property remains after specific gifts have been made (i.e., the residuary estate) should go to a single person or be divided among multiple people.
This simple statement on paper, however, can turn into a complex situation when there are competing claims to the same item.
When just one person inherits the residuary estate, an executor, personal representative, or trustee should encounter no significant distribution issues. That beneficiary receives Grandma’s ring and any other personal property that Grandma did not specifically gift to a particular individual. It is now their property, and they can do with it as they please. They can wear the ring, reset it, sell it, or let it sit in their jewelry box.
Issues arise when the residuary estate is left to multiple beneficiaries. Generally, the residuary estate is a pool of assets without a clear set of terms for how that pot is divided. Sometimes, the beneficiaries themselves are tasked with separating the personal effects among themselves; at other times, the executor, personal representative, or trustee makes the decision.
Ideally, the beneficiaries can agree about who receives the ring and other property that does not have a designated beneficiary. Different items hold different meanings to different people. Maybe each beneficiary has their heart set on a different item or set of items, and there is a neat division with no overlap and no quarrels.
When more than one family member is interested in the same item, the best scenario is that they can reach a peaceful resolution, perhaps involving the exchange of other sought-after items. If there is an impasse, the beneficiaries could sell this item and then divide the proceeds equally. Another option is for one beneficiary to buy out the other beneficiary’s interest in the item. They could also draw straws or flip a coin. The solution may depend on whether the dispute involves a single item, such as a ring, or multiple items, leading to a breakdown in the peaceful division of assets.
Beneficiaries may look to the executor or personal representative of the estate or to the trustee of a family trust for answers. If clear instructions are not in the deceased person’s will or trust, the executor or trustee may have discretion about how to carry out the decedent’s wishes. At the very least, they may mediate to reach a solution. Executors or trustees who are also beneficiaries of the estate may have to proceed with extra caution to avoid conflicts of interest.
As for who gets Grandma’s ring—or her pie plate, antique rocking chair, or anything else that belonged to her and does not have a named beneficiary—heirs, trustees, and executors need to brace for the possibility of an unresolved conflict that escalates to a legal dispute.
Sometimes, the best strategy for distributing personal possessions is to give things away while the owner is living. Asking loved ones what they want in advance can give everyone—including Grandma—a voice in the discussion about what to do with her belongings. This can provide more options for dividing possessions fairly and equally, either in person or through a will or trust.
A thorough estate plan also goes a long way toward avoiding family fights over heirlooms and keepsakes. Without proper estate planning, the likelihood of family conflict increases.
The attorneys at Altman & Associates are here to assist with all your planning and post-planning needs. In addition to helping people plan for how they want their personal possessions to be distributed after their death, we can assist executors and trustees in the administration process of distributing these items from an estate. We can be reached at 301-468-3220 or via our website at altmanassociates.net.
