If you’ve just started your estate planning in Huntsville, AL, then you know there’s a lot that goes into it—especially when it comes to writing out wills and trusts.
Suppose you’re like most people that have accumulated valuable assets throughout your life. In that case, you know how important it is to ensure that those assets end up in the right hands once you’ve passed on.
However, many people tend to overlook the smaller assets—as in the little things with sentimental value. For example, a piece of jewelry or a collection of autographed photos from your favorite entertainers. While these things are often written into wills and trusts, they’re just as quickly forgotten.
That’s where a personal property estate memorandum comes in handy. These documents allow you to list the loved ones you want to receive certain belongings of yours, whether they have sentimental meaning or not.
This article will discuss personal property estate memorandums and everything you need to know about them.
In Alabama, whether such a list is legally binding depends on when and how you sign it.
What Exactly Is a Personal Property Estate Memorandum?
A personal property memorandum (memo for short) is a simple document that allows you to make a list of your personal property. For example, tangible personal property may include clothing, pieces of art, jewelry, etc., and who you’d like those items to be distributed to after you’ve passed on.
A personal property memo is a document that remains separate from your last will and testament or living trust. You can rewrite the list as often as you like without new witnesses, though in Alabama that flexibility comes with a catch.
For an unwitnessed list to be binding in Alabama, it must already exist when you sign your will, and the will must describe it clearly enough to identify it. A list written or changed later can still guide your personal representative or executor, but it does not control (which we’ll talk about later in this article).
What Are the Benefits of Having One?
You’re probably wondering, what’s the point of having a personal property estate memo when I have a will and a trust?
Arguably, the most significant benefit to having this memo attached to your will is that it’s much easier to draw up, maintain, and modify repeatedly.
You can write whichever items you’d like into your last will and testament or a designated trust. However, suppose you acquire new items or end up relinquishing ownership of one or more items. In that case, you’ll find that adjusting your will or trust becomes expensive and time-consuming.
For example, there are attorney fees and other costs you’ll need to pay each time you make an adjustment. Not to mention, changing your will means signing a new will or a codicil before two witnesses, and changing a trust means signing an amendment that follows the trust’s own procedure.
For inexpensive keepsakes, a list that guides your family may be enough, but in Alabama a binding change still takes a codicil.
As mentioned earlier, you can change a personal property memo whenever you like, though in Alabama a later change guides your family rather than binds it. Additionally, having a personal property memo can minimize any conflict among family members regarding who gets to keep which sentimental items after you’ve passed.
What Can I Include in My Personal Property Estate Memorandum?
In Huntsville, Alabama, a personal property estate memorandum is typically used for your tangible assets. This would include items such as:
Jewelry
Clothing
Furniture
Pieces of art
Collectibles
Vehicles
Dinnerware, silverware, and other kitchen items
Tools
Family photo albums
Essentially, any small items you want to distribute among your family members can be included in your personal property memo. For example, suppose one of your children has a favorite coffee mug of yours or a set of fountain pens. In that case, you can use your memo to tell your family which sentimental items should go to which people.
However, not just anything can be added to your personal property memo. For example, it should not be used for real estate or for intangible property such as:
Money (this includes bank accounts)
IOUs
Copyrights or any other intellectual property
Stocks, bonds, IRAs, or other retirement accounts
Business properties
The big-ticket items may need to go through your last will and testament or an established trust. Items you do not list pass under the other provisions of your will, usually the clause leaving everything else. Only property your will does not cover passes under the state’s inheritance laws through the Alabama probate court.
How Can I Use a Personal Property Memorandum With My Will?
Some states make an informal personal property memorandum binding if your will refers to it, but Alabama does not. Your will itself must also be valid, meaning signed by you and two witnesses.
The personal property memo can be handwritten or typed, and you should sign and date it. If a change must be binding, though, it needs a codicil signed and witnessed like a will.
Additionally, your personal property memo should always begin with an opening statement, such as:
“I hereby bequeath/leave the following items of my tangible personal property to the beneficiaries/family members listed below….”
Afterward, you would list the personal items in addition to the names of whom they’ll belong to next. From there, sign and date the memo and keep the document somewhere safe with your will so that your executor will be able to find it when the time comes.
There are also a few things you should keep in mind when writing your personal property memo, such as:
If you’ve already written a particular item into your will, you cannot include it in your personal property memo as it will cause a contradiction, and the will shall override
Describe the items as clearly and concisely as possible, especially if there are multiples of the same things or there are similar items that can be easily confused with one another
Always include contact information—like the address and phone number— of each beneficiary on the list. This way, if your executor doesn’t know who they are, they’ll at least have a way to quickly get in touch with the beneficiary. It’s also a good idea to include a short description of each beneficiary’s relationship with you
Don’t forget—it should also be noted in your estate planning documents that this instrument exists and where it can be found. Otherwise, it may not be effective. Those items may be at risk for unequal distribution or left to arguing family members.
How Do Personal Property Memorandums Work in Alabama?
The legalities of personal property estate memorandums are determined by the state. Additionally, each state governs how the personal property memo should be worded to be recognized as a legally binding document.
Alabama, for example, is listed as one of the states that don’t recognize these personal property memos as legitimate legal documents on their own. That means your personal property memo won’t be binding in probate court unless it is signed and witnessed like a will or meets the rule below.
However, Alabama does allow a list to become part of your will by “incorporation by reference,” but only if the list exists when you sign the will and the will describes it.
In other words, according to Alabama Code section 43-8-139:
“Any writing in existence when a will is executed may be incorporated by reference if the language of the will manifests this intent and describes the writing sufficiently to permit its identification.”
Suppose your personal property memo is written out clearly, already exists when you sign your valid will, and is described in the will. In that case, the Alabama probate courts may recognize it as part of your will. If you change the list after that, the change needs a codicil signed and witnessed like a will.
There are many things to cover regarding your estate planning and writing out wills and trusts. However, suppose you notice that you’ve left out the little things that may mean something to someone else. In that case, a short, signed list can head off questions that otherwise turn into family arguments during administration.
Of course, even something as simple as a property memo can raise some uncertainty regarding its legalities and how it should be worded. If you have any doubts, contact us today to schedule a consultation with Sarah S. Shepard about how your will and your list should work together.
Sarah S. Shepard is an estate planning attorney at Sparkman, Shepard & Shepard, LLC in Huntsville, admitted to the Alabama State Bar in 2012. She prepares wills and trust-based estate plans for families in Huntsville and North Alabama. More about Sarah S. Shepard.