How to handle family heirlooms and keepsakes

When most people think of estate planning, they think of more liquid assets that include money, real estate, and personal property. However, included in someone’s estate could be invaluable personal property, such as family heirlooms or keepsakes. This type of personal property should not be overlooked in your estate plan just because it may not have a high dollar value, but still has sentimental value that cannot be quantified. Part of a complete estate plan is determining how you want these priceless family heirlooms and keepsakes to be distributed once you are gone.

Issues You May Face

An “heirloom” is a particular piece of personal property passed down from one generation to the next, which will likely continue to be passed down for generations to come. Be sure to talk about family heirlooms and keepsakes with your family so feelings and expectations regarding these items are out in the open. Also think about having your heirlooms and keepsakes appraised by a reputable company so you can provide your heirs with the necessary documentation and so the items can be more specifically identified in your estate plan.

How to Distribute

When it comes to family heirlooms and keepsakes, the more common approaches to distribution may not work.  If the item is not of significant value, there may not be a way to monetarily equalize all distributions.  This can also be the case if the dollar value of the keepsake is incredibly high compared to the value of the remaining estate.  In addition, if there is only one of such an item, there is no way realistic way to split the item between multiple people. Whether it’s great-grandfather’s WWI medals, the cherished family crystal, or your mother’s pearls, you will need to decide the best way to distribute these items based on your unique family situation. Regardless of who receives them, they are usually distributed by way of a personal property memorandum in those states that permit this practice.

The personal property memorandum allows you to express your wishes and avoid the hard feelings that could result if you left all of the personal property equally to your children. This document is a written statement regarding specific property; the document is then referenced in your last will and testament or living trust and identifies who should inherit what specific property. This document also has the added benefit of being modified or revised without the need to execute a new will or amend your trust. However, please remember, items listed in a personal property memo must be personal property – not real estate, cars, or bank accounts.

Gifting During Life

Because of the sentimental nature of family heirlooms, you may also want to consider gifting these items during your lifetime instead of waiting until your death. If you gift your family heirlooms and keepsakes during your lifetime, there is a personal joy in witnessing your loved one receiving the family treasure. That being said, be cautious of gift tax issues that may be incurred depending on the value of the item.  Another concern you may want to address, depending upon the value of the family heirloom, is whether or not this lifetime gift should be considered part of the recipient’s share of your estate after death.

Estate Planning Advice

A comprehensive estate plan that considers all assets – including family heirlooms and keepsakes – is key to making sure your wishes are followed once you are gone. Visit our website or call us today to set up a free 30-minute consultation so you can learn about your options to ensure all of your assets, no matter the monetary value, are covered under your estate plan to ease your mind about how to handle family heirlooms and keepsakes.