PLANNING FOR WEALTH & SECURITY

 By Attorneys Jennifer and Jeff Hawkins

 SOME PRACTICAL INHERITANCE ISSUES

Did you ever pick up a button that fell off a shirt or a screw that fell out of a piece of furniture, store it in a place that you are sure you would never forget, and later forget the location of that fool-proof storage? Imagine what your family members might experience if you should require long-term care or, upon your death, when they need to find important things. When you really think about it, a lifetime of accumulating stuff can make it very difficult to pass those items to someone else. This article offers some ideas about this problem, but it is only a starting point – you won’t find all of your answers here.

Many people think about listing all of their assets in their last will and testament and dictating to whom each asset should be distributed. The problem with this approach is that such a list may be just fine for big items, such as furniture, firearms, or other "big ticket" assets, but miscellaneous tools and equipment, such as vacuum cleaners, bed linens, and wall hangings, may be far too numerous to list in a will. Worse yet, if you try to list all of those assets, your list will sooner or later become obsolete if those items break or are replaced by other very different items. Alternatively, Indiana law allows a person to write a will that refers to a separate list that a person may maintain and update from time to time without having to update the last will and testament. This strategy works very well for families whose members love each other and get along very well because the maker of the list can simply tell the family members where the list is located and the family can simply follow the list like a cookbook. This strategy is much less useful or helpful in those families in which family members may be possessive and competitive for their inheritance.

A trust provides no better solution for this problem. A trust can list assets exactly the same way as a will can list them but the same listing problems as a will.

Listing names of beneficiaries on labels attached to specific assets is another strategy. This strategy works well if the label is very easy to see and the family members know to look for the labels, but the listing process can be rather tedious and sometimes the label may be hard to find. Another problem with this strategy is that some assets may appear to be worthless in the eyes of family members and assets may be thrown out before anyone sees the labels.

A favorite strategy is to simply sit down with family members, explain what is valuable, and discuss the best distribution plan. A variation on this strategy is to give a video-taped tour of the household and point out particular items of interest during the tour. Either of these strategies will work well for a family whose members get along well and can be very instructive to help those family members distribute or dispose of assets in an orderly fashion.

None of these strategies will work for every family and each person must decide for themselves the best strategy. It is important for everyone to take note that personal property is merely a worldly possession that usually declines in value over time. Most people cherish more highly the personal relationships that they build over a lifetime than the assets that they may inherit from others. A legacy of love, generosity, and compassion may be the most priceless gift that any person could pass to their family members. All of these thoughts seem very appropriate as we approach another Christmas season.

© 2010 by HAWKINS LAW PC, Estate, Trust & Business Attorneys. All rights reserved. Published with permission.