Virginia Beach, VA (Law Firm Newswire) April 19, 2016 – Many estate plans fail to consider the fate of items that do not necessarily have great monetary value, but have much sentimental value to the heirs.
Such was the case in the estate of comedian Robin Williams, whose children and third wife were fighting in court over possession of specific sentimental items, such as the tuxedo he wore at his wedding.
Mr. Williams bequeathed to his three children the clothing, jewelry and personal items he had accumulated prior to his third marriage, and that appears to include his tuxedo. However, his widow, Susan Schneider, inherited their home and its contents, one of which was the tuxedo. She has said in court papers that an individual took such items from the home, and that she has a right to them.
“When crafting an estate plan, individuals and families should not overlook personal effects merely because they may not have great monetary value,” said Andrew H. Hook, a prominent Virginia estate planning attorney with Hook Law Center with offices in Virginia Beach and northern Suffolk. “Items of sentimental value that were not mentioned in a will or trust can often create much friction among the beneficiaries.”
While the majority of estate plans have a tendency to address the major items, such as the house, investments and bank accounts, it is the personal effects that can create the greatest amount of discord among heirs. In order to avoid such contention, the grantor could place the house and its contents into a trust called a qualified terminable interest property trust, which would provide the surviving spouse with use of the house for the rest of her life. The children would inherit the house following her death.
However, this kind of trust is generally used to hold assets that produce income, which passes to the surviving spouse, while safeguarding the principal for the children. Placing a house in this kind of trust could have undesirable consequences if the objective were to subsequently give the house to the children. Since the spouse is entitled to require that the principal create income, she could authorize that the trust sell the house.
A more straightforward resolution is for the grantor to list the items that the grantor wishes the beneficiaries to inherit, and give the list to the executor in the form of a letter that is excluded from the estate plan. Therefore, in the event the estate is audited, the IRS will not view the letter and request items that are listed but are not available any more.
Furthermore, older individuals are advised to give everything they wish their spouse to possess while they are still living, or make a list that specifically states each item that the spouse is to receive with the remainder to be transferred to the children.
Learn more at http://www.hooklawcenter.com/
Hook Law Center
295 Bendix Road, Suite 170
Virginia Beach, Virginia 23452-1294
5806 Harbour View Blvd.
Suffolk VA 23435
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