Clients are often so concerned about their significant assets that they overlook their tangible personal property. Unfortunately, this can sometimes lead to family disagreements and even litigation in particularly contentious situations.
A member of the American Academy of Estate Planning Attorneys was conducting a trust administration for an elderly father who had died recently. The father’s trust simply stated that the trustee was to dispose of his tangible personal property with the rest of his trust assets. The trust provided that the trust estate was to be divided into seven shares, one for each of his five boys and two girls. A dispute arose among the boys regarding who would get a plastic gun housed in a small glass dome. Each wanted the item, even though it was worth well under fifty dollars. The attorney could not understand the reason for the sentimental value of this item, as the father was not a policeman, sheriff, or marksman. None of the boys could even tell the attorney how their father acquired it or what was so special about it. They just all wanted it.
Another estate planning attorney dealt with the estate of a mother who had collected depression-era glass and had quite an extensive collection of different colored glass pieces. In her last years, the mother began gifting various pieces to each of her three children. Two of the children took their gifts while the third told his mother to hold them at her home where she could continue to enjoy them and he would get them when she died. Like the father above, the mother’s estate plan indicated all the personal property was to be split equally between the children. After the mother died, the trustee was attempting to distribute any of the personal property desired by the children before the rest was sold at an estate sale. At that time, the son wanted to receive the pieces that had been given to him by his mother. The trustee was unaware of the previous gift and one of the other siblings contended that her mother had told her she was to receive many of the same pieces that had been gifted to the son. Fortunately, the siblings and trustee were able to agree regarding the disposition of the glassware. But, it could have turned into a courtroom brawl.
This problem is not confined to small- to moderate-sized estates. On February 3, 2015, the New York Times Arts Section ran a story about how Robin Williams’ widow and his three children from previous marriages were in conflict regarding the disposition of Mr. Williams’ personal property, particularly his “cherished belongings that include his clothing, collections, and personal photographs.”
After more than fifty years since her death, the estate of Marilyn Monroe is still embroiled in litigation over her personal property, most importantly her publicity rights. When she died, Marilyn had an apartment in New York as well as a residence in California. the executor of her estate claimed she was a resident of New York in order to avoid the California Estate Tax of as much as 16% of her estate. (In 1982, California voters eliminated the state estate tax by passing Proposition 6.) In her Will, Marilyn stated she was leaving her acting mentor, Lee Strasberg, all her personal property. She expressed her desire that he “distribute [the effects] among my friends, colleagues and those to whom I am devoted”. Instead, Mr. Strasberg stored them in a warehouse and left them to his widow, Anna. Mrs. Strasberg assigned the personal property and publicity rights to a limited liability company, Marilyn Monroe LLC. Then Mrs. Strasberg went about protecting the personal property by successfully suing many individuals and entities. In 1994, she sued Odyssey Auctions to prevent the sale of Marilyn’s personal property consigned to it by the nephew of Monroe’s business manager, Inez Melson. Subsequently, Mrs. Strasberg sued the children of four photographers to determine rights of publicity — the licensing of images of deceased personages for commercial purposes. The decision as to whether Monroe was a resident of California, where she died and where her Will was probated, or New York, which she considered her primary residence, was worth millions to Marilyn Monroe LLC.
In 2007, a court in New York ruled that Monroe’s publicity rights ended at her death in 1962. Later that year, California passed a law, supported by the Screen Actors Guild and Anna Strasberg, that established inheritance rights of publicity for non-family members, provided that the deceased celebrity or famous person was a resident of California at the time of his or her death. In 2008, the United States District Court ruled that Marilyn was a New York resident at the time of her death. The court cited the statement by Marilyn’s executor to California tax authorities that Marilyn resided in New York. This decision was reaffirmed by the United States District Court in New York in 2008 and again in 2012 by the Ninth Circuit Court of Appeals. Judge Kim Lane Wardlaw ruled: “Monroe’s representatives took one position on Monroe’s domicile at death for forty years, and then changed their position when it was to their great financial advantage, an advantage they secured years after Monroe’s death by convincing the California legislature to create rights that did not exist when she died. Marilyn Monroe is often quoted as saying ‘if you are going to be two-faced, at least make one of them pretty.’”
Many state statutes allow residents to reference a separate tangible personal property list in their Will or trust. Rules vary from state to state – some require that the personal property list must exist at the time the Will or trust is executed while others allow a later writing if statutory formalities are followed.
Another thing to consider is gifts of personal property to minor children. The Will or trust should provide for the establishment of a trust for the child or that the gift be held by a named custodian under the Uniform Gifts to Minors Act or Uniform Transfer to Minor’s Act, as applicable in your state.
Many of these problems can be avoided, but special planning by an experienced estate planning attorney is needed. Our office is familiar with the various planning options available for planning for the disposition of personal property. As a member of the American Academy of Estate Planning Attorneys, our firm is kept up-to-date with information about recent developments. You can get more information about scheduling a complimentary estate planning or elder law appointment and the services offered by our firm by calling our office at (408) 356-9200 or (831) 476-2400.