DISTRIBUTION OF TANGIBLE PERSONAL PROPERTY
AMONG FAMILY MEMBERS
by
Gary L. Brown
BROWN & ASSOCIATES
Attorneys & Counselors-at-Law P.L.L.C.
Enid, Oklahoma

The distribution of tangible personal property (household furniture, equipment, personal effects, memorabilia, photographs, etc.) is often one of the most difficult tasks of Estate Administration. These items often have sentimental and emotional attachment to the family members. Such items often include one of a kind items such as a wedding ring or family heirlooms that cannot be divided "equally" among designated family members. If the distribution is not handled properly by the family, it can lead to hurt feelings, misunderstanding and permanent family discord.

Unfortunately many parents fail to make special provision with regard to their "things." Often the issue is technically addressed in their Wills by stating that their tangible personal property shall be "divided equally among their children as they may mutually agree. This lack of direction in the Will is often made worse by a parent orally promising certain items of personal property to certain children. Inevitably when the family is sitting around the coffee table after the parent's death, much to everyone's chagrin, they learn Mom promised the same item to several different children.

Another technique often encountered by lawyers is the parent who labels the property with the name of the intended beneficiary. This usually starts with the parent casually saying to her children, "let me know what you want so I can put your name on it." The dilemma is that these informal labels have no legal effect if a Will specifies a different distribution or simply provides that the property be divided "equally among the children." If the family members aren't mutual in their agreement to observe the property labeling system either the instructions indicated by the labeling system then legally the labels have no effect and every lawyer has seen the case where "labeling system" is sanctimoniously held sacred by the child whose names on the label a begrudged by the child who didn't have their name on labels.

It is usually during the process of dividing the tangible personal property that intra-family problems occur, either issues that have been stirring for some time or new issues that no one expected. Below I have listed a few of my axioms as to intra-family dynamics and the estate distribution process, especially when dividing the personal property in an estate.

Observations on Family Dynamics and Estate Distribution

  1. The process of dividing the "things" is not given the thought and importance it deserves. Often the family shrugs and assumes that ". . . we can just work it out."
  2. In every group of siblings there are a variety of personality traits. Passive or aggressive, sentimental or not sentimental, materialistic or non-materialistic, confrontational or non-confrontational, and the list goes on. When highly personal family possessions are being "passed out," conflicting personality traits will surface. Often it will be confrontational, other times it will be repressed, but either can cause significant family problems.
  3. If spouses (in-laws) are included in the process, family dynamics often become very complicated.

Methods of Distribution to Consider

Through the years I have seen several methods used to deal with the issue of family property distributions. One that I often see used, but that does not seem to work very well in practice is the "Public Auction." The parent's Will directs that all tangible personal property be sold at public auction and the proceeds distributed equally among the children. "If the kids want anything they can show up and bid on it with everyone else."

This process requires children who want certain family items to bid against the public for these possessions. In most cases where this method has been used, I have seen considerable anguish among family members. First, all their parents' possession are on public display for the auction, and second, they have to bid against others to acquire cherished sentimental items or family memorabilia. No one ever seems very happy with this method.

Often the provisions of the Will modify the auction procedure by allowing family members first right to bid on items at a family auction. I have not seen this used with much success either. Instead, family members find themselves in bidding wars with their siblings over choice items.

One of the more successful methods I have seen used and which I normally suggest to family members wanting to deal with this issue is the "Family Lottery." I suggest to parents that they identify their "unique items" and prepare a list giving this unique property to specified beneficiaries. This is done on a form attached to the Will or Revocable Living Trust. Unique property includes things that are one-of-a-kind, have particular sentimental or family attachment and cannot be easily divided, or items of particularly large monetary value. Examples of this would be mother's diamond wedding ring, the heirloom blanket chest that great-grandmother Smith brought from Ohio, the $30,000.00 French antique chest, the rusted shotgun that great-grandfather Smith used to protect his homestead claim, etc. For these items, it would be virtually impossible to come up with a satisfactory selection process among the various siblings. If the parents direct who gets each of these items and if the parents try to be equitable so everyone gets something of this nature, then children normally accept their parents' instructions. The children may wish Mom and Dad had given them particular items, but they aren't mad at their brother or sister because they didn't receive these items.

I usually discourage parents from making long, extensive lists unless there are special circumstances or they know precisely what the various children prefer. I recommend they limit this list to truly "unique items," typically 10 items or less for most families.

The family lottery process provides that the remaining non-unique property be selected in rounds among the heirs with each picking in turn until all the important property has been selected. You often reach a point in the selection process where nobody wants anything else and the family then usually agrees to give the rest to a social service charity or to sell these items at an estate sale and divide the proceeds.

I have enclosed a family lottery procedure memorandum that provides a model for conducting this selection process.

One final thought. It is my experience that if a family agrees in advance, either by insert in the Will or by family agreement if the Will is silent, to a formal selection process and they follow it and do not vary from the formal procedure, everything will go much more smoothly, even in families with long-term dysfunctional issues among the siblings.

The family lottery is a natural process that is fair, practical, and allows the emotional process of dividing family personal property to proceed in a mechanical manner that eliminates as much emotion as possible.

 

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