WHAT TO DO ABOUT SPECIFIC GIFTS

 One of the terrible things about probate is its public nature. Imagine this; you have a very nice new 1999 Cadillac that you have taken very careful care of and want to give to your son after you pass away. You have a will prepared by a probate attorney (most attorneys that prepare wills do so to get the probate fees when you die) and after your death the automobile goes to your son. A few weeks after the probate allows this distribution to take place your son starts to get annoying phone calls from telemarkers at dinner time trying to sell him automobile insurance on his new 2002 Cadillac that he inherited from you. He asks them how they know all this private information about his personal affairs and one of the telemarketers informs him that they have a team of people that routinely scan the probate records so that they can "help" prospective clients. Your son angrily hangs up on the telemarker and calls the probate court the next day to complain so that they won't continue to give out this private information about your estate. The probate worker informs your son that there is nothing he can do because the law requires that all of the information about your estate be available to the general public, including annoying telemarketers. Had you created a living trust, this information would have remained completely private to everyone, including the probate court. The only people that would receive any information about your estate are the people that you specifically designate.

 Specific gifts fall into two categories, gifts of high financial value (such as cash or things like jewelry) and gifts of high sentimental value (such as family heirlooms). Obviously we don't gift away ordinary household items. There are three methods of designating specific gifts. The first method is to designate them in your estate plan. This is a legal obligation meaning that the law requires that it must be fulfilled. For example, you desigate that upon your death your wedding and engagement ring be given to your oldest living daughter. Therefore, upon your death the person that you designated to be the administrator (the first backup trustee or executor) will physically deliver this specific jewelry to your oldest living daughter. But this method may become too difficult to maintain if you have many specific gifts and many changes over time.

 (most people use this method) The second method is to make out a list that you create on your own. This is not a legal obligation but instead a moral obligation (most children will follow the wishes of their parents). Because this is not a legal obligation the attorney that prepares your estate plan does not need to see or know of this list. Also, because the list is private, it does not go through probate. What types of information to include on this list is critical. You must designate specifically what the item is and to whom it will be going to. Don't write, for example, "my diamond ring to my daughter." You may have two diamond rings and three daughters. Don't think that they will know what you meant, because they may not know and when it is time to deliver this ring after you die they can't ask you anymore. When you create a list, the standard that you use is that a total stranger, someone who doesn't know you, doesn't know your things and doesn't know your family, could pick up the list, walk into your home, and without talking to another person, could immediately start executing the list. Also, when specifying an item you may want to write the normal location where the item is kept. The reason that it is important to write where the item is normally kept is because it could get temporarily moved and this can cause confusion as well as arguments. It is surprising how many relatives can become "backyard" lawyers when someone has passed away. Although the list does not have to be witnessed or notarized, doing so is acceptable. It is important however to sign and date the list so that you make it clear that this is your intent. Also, as a practical matter, don't keep a lot of out of date lists around because not only can this lead to potential confusion but hard feelings as well if you change your mind on the distribution of items.

The third and final method is to simply let your family choose among themselves with the administrator being the final authority if there is a dispute. Again, this method does not put these items through probate. You can use any of these methods in combination to fulfill your wishes.

David J. Bernstein is an Attorney in practice since 1983, concentrating on estate and tax planning. The primary focus of his practice is the preparation of Living Trust Arrangements and Nursing Home Estate Planning. He received his bachelors degree in Accounting from Kent State University and his Juris Doctor of Law degree from the University of Akron. He is a frequent lecturer on Living Trust Arrangements. For a free copy of his one hour video taped seminar on Living Trust Arrangements, call David J. Bernstein at 440-349-4889.

For a FREE copy of his one hour video taped seminar on Living Trust Arrangements, call David J. Bernstein at:

 440-349-4889

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