San Diego Estate Planning Lawyer Blog
Something to consider when you are making an estate plan is taking stock of just how much stuff you own. While we generally discuss an estate in terms of major assets (real estate, bank accounts, brokerage portfolios, etc.) there is also quite a bit of tangible personal property or household effects included. Some personal property can be quite valuable, such as artwork or antique furniture. But much of your tangible property has primarily personal or sentimental value—think of family photographs, books, and various mementos scattered throughout your house. Upon your death, someone must take responsibility for all of these items.
Your estate plan should specify how to distribute your tangible personal property. For example, you might direct your children to divide all household effects between themselves, with your executor settling any disagreements and disposing of any unwanted items. Similarly, if you place your assets in a living trust, you may authorize your trustee to decide the best means of disposing of the contents of your house.
Failure to Clean Out House Drains Trust Assets
Keep in mind, if you want your estate or trust to sell your house after your death, its contents must be cleared out first. Unnecessary delay can cost your trust or estate significant time and expense. Here is a recent San Diego case that illustrates the problems that may arise in such a situation.
The case involves a La Jolla woman who died three years ago. Some years before her death, the woman created two living trusts, one for her residential property and the other for her tangible personal property, i.e. the contents of her house. The woman had two daughters, one of whom was authorized under the trust to designate a successor trustee under certain circumstances.
After her mother’s death, a series of professional fiduciaries took over as trustee for both the residence and personal property trusts. In late 2013, a San Diego probate judge ordered the most recently appointed trustee “to remove and turn over to the daughters the tangible personal property from the La Jolla residence.” Despite this order, the trustee said the daughters ignored his “repeated requests” to clean out the house. At one point, one of the daughters told the trustee that she “had arranged for the Salvation Army to do a full-house clean out,” but that never took place. Several more months elapsed before the trustee asked the probate court for additional instructions.
The California Attorney General’s office, which has a duty under state law to protect charitable trust assets, weighed in before the probate court, noting the lengthy delay in cleaning out the house has prevented the trustee from selling the house, thereby depleting the trust’s assets. The court agreed and ordered the trustee to immediately remove all tangible personal property from the residence. The daughters appealed, but in a November 2015 decision, a California appeals court panel upheld the probate judge’s order.
Need to Speak With an Estate Planning Lawyer?
The above case may be unusual but it does emphasize the importance of promptly disposing of tangible personal property. If you have questions regarding this or any related subject and need to speak with a qualified San Diego estate planning attorney, contact the Law Office of Scott C. Soady today.