Testamentary Gifts of Personal Property: Avoiding “Sticky” Situations
On the recent season premiere for the legal drama The Good Wife, the show’s protagonist represented a client whose mother had recently passed away. In lieu of a last will and testament, the client’s mother affixed sticky notes with the names of her beneficiaries to all of her personal belongings, including a Chagall painting worth $8 million.
Notwithstanding the real-life legal problems with the premise, in the storyline there was just one problem with the deceased’s grand testamentary plan: due to a heat wave, all of the sticky notes had fallen off. Lawyers for the beneficiaries, armed with expert witnesses, were left to fight over whose sticky note fell off of the expensive artwork.
Thanks to the magic of television, the parties were able to reach a neat resolution before the credits started rolling. However, disputes over items of personal property such as art and jewelry can be a significant source of tension amongst the beneficiaries of an estate, especially when there is uncertainty around the deceased’s intentions.
When there is a specific recipient in mind for a testamentary gift of personal property, the testator must ensure that there is a provision for that gift in his or her Will. Bearing in mind that any personal property not expressly gifted will fall into the residue of the estate, testators will also want to ensure that their Will includes a provision regarding the division of residuary property amongst the beneficiaries.
Instead of making specific bequests of personal property in the Will, a testator may instead wish to create a separate memorandum (often referred to as a personal property memorandum) that deals with the division of personal property amongst the beneficiaries.
A memorandum can be binding or precatory – that is, an expression of the deceased’s wishes that is not binding on the estate trustees. In order to have binding effect, a personal property memorandum must be validly incorporated by reference in the testator’s Will. As previously discussed in this blog by Paul Trudelle, there must be a reference to the memorandum in the Will, the memorandum must exist at the time the Will is executed, and the memorandum must be “ascertainable” in order to be validly incorporated by reference in a Will.
While disputes over testamentary gifts may make for an entertaining hour of television, the reality can be far more protracted and unpleasant. Testators should give careful thought to the division of personal property, and ensure that their Will or memorandum provides clear direction to the estate trustees. The failure to do so could leave the estate trustees and the beneficiaries in a “sticky” situation.
Thank you for reading,
Umair Abdul Qadir