Estate planning strategies cover the distribution of all types of property after a person dies. Through the use of a will or trust, a person designates who should receive each type of property. Tangible personal property is defined as personal property that can be touched. This includes household items, books, jewelry, cars, boats and collectibles. The range of value for these items varies significantly from nominal to high.
To avoid any confusion, the terms of the will or trust should be very specific when it comes to tangible personal property. Vague wording and assuming it should be left in a residuary estate are some very common mistakes found in do-it-yourself estate plans. This can cause a lot of problems among beneficiaries if multiple people make claims to the same items.
Specific bequests may need to be included for certain items like valuable pieces of art, grand pianos or boats. It is not realistic to assume multiple beneficiaries can inherit the same item. This typically results in a forced liquidation. Careful consideration should also be given to how these items will be stored, maintained, insured and transported.
There are some other tangible personal property items that need more specific planning.
Guns
The Federal Gun Control Act imposes restrictions on the transfer of weapons. Maryland also has its own set of rules. See our blog post Gun Trusts for more specific information. If you own firearms, you may need to establish a gun trust in your overall estate plan.
Alcohol
The transfer of valuable wine collections or other alcohol is governed by Maryland state law and may require a license. It may be necessary to have a special valuation done of the collection by a qualified appraiser. Minors cannot inherit these items outright.
Endangered Species
Federal laws such as The Endangered Species Act of 1973, The African Elephant Conservation Act of 1989 and the Convention on International Trade in Endangered Species and Wild Fauna and Flora govern the transfer of certain endangered species. Possession of certain items may be considered strict liability crimes and carry severe penalties. If you own any type of endangered species and want to transfer it to beneficiaries under your estate plan, there are certain document ownership forms that must accompany your estate plan.
Aircraft & Boats
Often aircraft is owned by a single purpose limited liability company which holds the title during the owner’s lifetime and transfers the membership interests at death. Small boats are typically not an issue and can be retitled appropriately during the estate administration process. Vessels over 5 tons must be registered with the National Vessel Documentation Center.
Pets
Many people fail to realize that pets fall under the category of tangible personal property as well. In order to best provide for pets, it is recommended that you establish a pet trust, properly funded with assets to care for the pet, and designating a trustee to oversee the maintenance. You can also appoint a separate caregiver and provide compensation. For more information, see our blog post on Pet Trusts.
During your consultation with our experienced estate planning attorneys, we ask very detailed questions about the types of tangible personal property that you own. As you can see from above, there are certain items that need special attention. To get started on a comprehensive estate plan, contact our office located in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599 or emailing us at office@stoufferlegal.com.
