Estate planning involves dealing with a variety of things. While you may associate the financial side of your estate planning with distributing large assets like your home, car or financial accounts, sometimes assets with much smaller dollar-values may mean the most to your loved ones. With proper and complete estate planning, you can ensure that your wishes and preferences about the distribution of assets, both great and small, are known and can be followed.
When people think about estate planning, they often think first about the distribution of assets. And, often, when they think about the distribution of assets, they think first about the “big-ticket” items, like houses, vehicles, financial accounts, and so forth. However, sometimes those are not the assets that matter most to loved ones. Sometimes it is things with lesser amounts of dollar-value that may mean the most, and can generate the most happiness, or hostility, among your loved ones. That's why, when you create your estate plan, it is very important to ensure that, not only have you planned for the assets that have high dollar values, but also for those things that have high sentimental value.
The things that may matter to your loved one could be extremely varied and, sometimes, surprising. This aspect of estate planning can be a great way to begin a conversation about estate planning with your loved ones. As you prepare to create your estate plan, your children or other loved ones may be uncomfortable thinking about serving as your health care proxy, but might be more willing to discuss with you the tangible personal items that have always given them that “warm and fuzzy” feeling.
This has a two-fold benefit: it gives you an opening to begin the conversation you need to have with your loved ones about your goals and objectives in terms of your estate planning, and it also gives you an opportunity, potentially, to discover things you did not know. Maybe you never knew how much your old rocking chair meant to your daughter. Or what a strong affinity your son had for that vintage-but-rusty toy fire truck you kept in the basement. If you have multiple loved ones who all cherish the same item, this conversation may give you the chance to take these “popular” items and reach an compromise agreeable to all regarding who gets what. By having this conversation, you can learn these things and be more prepared to complete your estate plan in full.
Once you're armed with this factual information, what should you do with it? If you have an estate plan with a revocable living trust, it may seem challenging to ensure that your tangible personal effects get to the destinations you want. After all, you may wonder… how you fund a bunch of Beanie Baby dolls into your trust? Fortunately, your trust has a way for you to ensure the correct destination for these personal effects. You can create what's called a “schedule,” which is included as part of your trust agreement document. For many people, when they establish a revocable living trust, this schedule will be called “Schedule A.” Regardless of what you name the schedule, it is the place where you can list assets that do not have deeds or titles or other written documents establishing ownership. Your Schedule A can include everything from your furniture to your china, crystal and silverware to antique toys to your baseball card collection. Depending on the type of asset you've listed in Schedule A, you may also want to write up a “Bill of Sale” from you to your trust. Your attorney can help you decide which assets, if any, require this step.
A character from a popular 2009 zombie movie created several life rules that he passed on to viewers, including one that recommended to “enjoy the little things.” In real life, sometimes it is the littlest things that create the biggest enjoyment. With a carefully thought out and complete estate plan, you can ensure that your goals will be achieved to the biggest extent possible.