Everyone in the family has fond memories of listening to Grandad strum on his old guitar. So, when Grandad passed away, that old guitar was one of the most coveted items among surviving family members. Unfortunately, two of Grandad’s daughters each remember him saying he wanted her to have the guitar after he passed. And they both may very well be right—over a long lifetime, it’s easy to forget what you’ve said to whom. The thing is—it might not even be a particularly valuable instrument, but there’s a lot of sentimental value attached to it. Conflicting claims lead to a squabble, feelings get hurt. And Grandad’s personal representative is stuck in Solomon’s shoes, trying to arbitrate a dispute without an obvious solution. The simple solution for this needless dispute leads to today’s topic of using a personal property memorandum in Florida estate planning.
The kind of conundrum mentioned above is all-too-common in Florida probate or Florida trust administration. Grandad might have had a well-planned estate in general, with a well-thought-out will distributing assets fairly and efficiently among his heirs. But personal property, because it is typically less valuable than other assets, tends to get overlooked—usually becoming part of the residue of an estate and not earmarked for any single heir. That can be a problem because a disagreement over a seemingly minor item, with no clear instructions from the decedent, can erupt into a major family conflict.
The Role of a Personal Property Memorandum in Florida Estate Planning
In the above scenario, Grandad could have significantly reduced the risk of conflict by preparing a personal property memorandum (a/k/a “memorandum of personal property” or “personal property memo”) as a supplement to his will. A personal property memo, which is essentially just a signed list identifying specific items and intended recipients, provides a means of clearly delineating who gets what. In doing so, the memos become an important safeguard against estate conflict.
When it comes to preparing a personal property memorandum in Florida estate planning, you can’t just jot down a list of who you want to get your stuff and expect it to be enforced by a Florida probate court. A personal property memo needs to satisfy certain requirements set forth in the authorizing statute, Fla. Stat. §732.515. For starters, you need a valid Florida last will (or trust instrument if you’re going that route) that mentions your intention to create and incorporate a separate list of tangible personal property.
To be effective, a personal property memo must be signed by the testator (i.e., the individual whose will is being supplemented). Florida’s personal property memorandum statute doesn’t technically require the list to be dated, but dating is a good idea, as it helps avoid confusion if the list is amended or revised later. And, critically, personal property memoranda must also identify with reasonable certainty the items to be distributed and the individuals who will receive them. You need to make sure each individual item and beneficiary can be readily identified without any further explanation.
One of the biggest advantages of using a personal property memo is that it can be amended without going through all the formalities for creation of a will or codicil. So, if you acquire new personal property or transfer existing property (or just change your mind about some things), you can alter your memo later. Or you can just write up a new one to supersede an earlier memorandum, which is one of the reasons it’s important to date the document.
However, if your will and personal property memo both happen to include the same item, the Florida Probate Code says that the will takes precedence—even if the memo was created more recently.
What Property Should be Included Within a Personal Property Memorandum
In Florida (and most other states that allow them), personal property memos can only be used to distribute “tangible personal property.” Right off the bat, that excludes real estate—because real estate is not personal property. “Tangible” means things that you can hold or touch—objects like (for example) antiques, furniture, musical instruments, firearms, and even pets.
Conversely, intangible property cannot be distributed using a personal property memo. So, things like bank or investment accounts, securities, insurance policies, and intellectual property are excluded. You can touch cash, but it doesn’t qualify as “tangible personal property.” Neither do promissory notes or other evidence of indebtedness.
Another exception built into the Florida law applies to property “used in business or trade,” which is not eligible for inclusion in a personal property memo. That rule means that certain items might be includable in one context but not in another. Tools you keep in the garage for household projects can probably be included, but those same tools might be ineligible if you use them in your blacksmithing business.
One of the most valuable personal property items that most people own—motor vehicles–also shouldn’t be listed in a personal property memorandum. That’s because vehicles have titles, and a vehicle’s title is what determines who owns it. If an item like a vehicle or boat has a certificate of title, it’s better to include it directly into the will or Florida revocable living trust instrument. When the time comes, the Florida personal representative or Florida trustee signs over the title to the beneficiary. Or, you can arrange to transfer an asset outside Florida probate through joint ownership with a right of survivorship in Florida. When an asset is jointly owned with a right of survivorship, full title automatically vests with a surviving co-owner upon the other owner’s death.
Even if there’s no title, you’re usually better off disposing of particularly valuable personal property through a will, rather than a personal property memo—even if the item qualifies as “tangible personal property.” An attested will provides more certainty and is less susceptible to ambiguity or tampering than a memo that can be informally revised. So, if your estate will include heirloom jewelry, for instance, that would fetch a hefty price if you ever decided to sell it, you might want to address it within the will itself. If you’re unsure whether an item is appropriate for a personal property memo, you should check with a skilled Florida estate planning lawyer.
Preparing a Personal Property Memorandum in Florida
A Florida personal property memo doesn’t need to be a sophisticated legal document—that’s a will’s job. A memo should just have a title and/or brief description clearly identifying the document’s purpose, the date and testator’s signature, and a list of items and beneficiaries. Each item needs to be described with certainty so that anyone administering the estate will know exactly what is being referenced. Instead of listing simply “my desk,” you might say, “the red oak, drawered desk in the living room.”
Likewise, beneficiaries should be identified sufficiently to remove any room for confusion. Ideally, a memo includes at least the full legal names of recipients. If you just identify “John,” your personal representative might not know whether you mean John, your cousin in Nebraska; John, the guy in the office next to yours at work; or John from the Moose Lodge.
One of the principal goals with any estate planning is to avoid family conflict in your Florida estate plan. Most estate plans adequately address large assets, but it’s the small stuff that often starts the fights. In Florida, incorporating into your will a personal property memorandum that distributes tangible items with sentimental or economic value—but maybe not quite enough to warrant direct inclusion in the will itself—is a smart and efficient way to avoid future problems.
Steve Gibbs, Esq.