Estate Plan Essentials Part 1: Division and Distribution

A person writing his name.
When the time comes each year to review your estate plan, the thought of looking through all that paperwork and legal language can be daunting. But the job can be made easier if it is broken down into parts to be reviewed one at a time. Every complete estate plan can be divided into at least three separate but related sections.  This week we will publish a series of posts highlighting the documents that make up each of these sections.

The part of your estate plan with which you are probably most concerned is the distribution of assets.  After all, for most people, ensuring that their assets are distributed how they want and to whom they want is what drives them to see an attorney in the first place.  Your Trust is the main document that describes and gives instruction for the distribution of assets; specifically, in articles with titles such as “Distribution to my Descendents”, “Distribution of Remaining Trust Property,” “Remote Contingent Distribution.”  However, three other documents in your estate plan deserve your attention on the subject of distribution as well.

Your Last Will and Testament is an important document which deals with distribution of assets.  If you have a Trust it is likely that all of your assets are owned by that Trust, and your Will is probably a short document stating simply that any assets not included in your Trust should be put into your Trust and distributed accordingly.  However, if you created your Will before you decided to create your Trust, you could have conflicting documents and should ask your attorney for a new Will which mentions the existence of your Trust.

Two other smaller, but important documents pertaining to distribution are the Assignment of Personal Property and the Personal Property Memorandum. The Assignment of Personal Property is a document which transfers all of your smaller, tangible property (such as cars, antiques, artwork, furniture, etc.) into the name of your trust, thus avoiding probate.  This document is one that should be renewed (re-signed) every 2-3 years to ensure that all assets—even your most recent purchases—are included.  The Personal Property Memorandum is the document in which you give specific property to particular people, for example your diamond ring to your granddaughter, or your baseball card collection to your favorite nephew. This is a very simple document, and can even be handwritten, but it should be kept with your trust, and even be referred to in your trust.

Come back Wednesday to read our next post in the series about financial agents and powers of attorney.