What Everyone Wants to Know About Property Inventory Forms
What is going to happen to all your stuff when you and your spouse die? Does anyone even know what you have? Where it is located? What it’s worth? Do you? Recent changes in the law provide more flexibility in designating who will get your tangible personal property when you die. You no longer need to include an itemized list in your Last Will and Testament and/or revocable trust. Now all you have to do are fill out the Tangible Personal Property Inventory Forms and update them informally as needed.
We created Tangible Personal Property Inventory Forms to help our clients take full advantage of the changes in the law. These forms must be used in conjunction with a Last Will and Testament or revocable trust to be effective. The forms are amendments to those documents. This means you maintain the protection of a will or trust, but have the flexibility to change.
You update the forms by making changes in your own handwriting. Cross out an item and initial it when you dispose of an item. You just add new items to the list and initial them when you acquire new items. If you want to change the person who is to receive the property, you cross out the old designation in its entirety, initial it, and fill out a new line, then you initial the new entry.
As you fill out these forms, we strongly encourage you to leave some items to people outside your nuclear family. This is because there are many people outside your nuclear family that have made your life more enjoyable. One way to show your appreciation and create a special bond with these people is to leave them a thoughtfully selected piece of your personal property.
You could leave your war medals to the grandson who always begged to hear one more war story. Why not leave your stamp collection to a longtime employee who shares your interest in that hobby. How about giving that crystal punch bowl set to the neighbor who always helped you prepare for parties. Maybe leave your tools to the person who was always borrowing them. Or leave your elaborate holiday yard decorations to a friend who will continue your tradition of spreading holiday cheer. You get the idea.
By giving people outside your nuclear family small gifts, you will rest assured that all those who matter to you will remember you positively. You also set a good example for your family by reminding them that you get nowhere in life all by yourself.
When you are done filling out these forms you will:
- Use them to substantiate a loss to the insurance company and provide information to the police to assist in recovering the property.
- Use them to provide evidence to the insurance company if the property is damaged or destroyed in a fire.
- Have found items that need to be thrown away or donated to charity (tax deduction).
- Have had the opportunity to see if anything is missing or in need of repair. Then you can start a search or get it fixed.
- Have prevented your heirs from fighting over your household items and personal effects.
If you can’t decide how to distribute the bulk of your personal property among your primary beneficiaries, i.e., your children, we recommend you use the following procedure: (1) On the form, instead of writing individual names, designate a class, i.e., my children, who are to share the gift. (2) In your will or trust, you instruct this class that they must follow a fair system of allocating your personal property among themselves.
For example, the class could draw straws to determine the order it chooses items. Then they take turns choosing items, one item each the first time around, two items each the second time through, five items the third time through, until the items are gone, this will make it fair and increase the speed of the process.
Instead, you could instruct them to estimate the total current value, if not included on the forms, and divide this number by the number in the class to determine the value of each person’s share. Then the class members take turn picking items until their share is gone.
If there is a dispute over the value of certain items, these items may be sold at public auction. This establishes an accurate value because the public will be able to bid also. The class members use the profits from the sale to offset the price paid by the class member for the desired items. This also provides a market for unwanted items.
In addition to the forms, we have some advice on how to accomplish the physical inventory in an orderly fashion. A separate form should be used for each room in the house and for each member of the household. Using separate forms for each room makes items easy to index and locate; and using a separate form for the personal effects of each member of the household makes it easy to supplement.
Try to accomplish the whole inventory in one day. If you do not, it’s hard to return to it later and find your exact stopping point. You may either do it as a team with your spouse and oldest child, hire college students, or use a professional inventory service. You need at least two people, one to identify and call out the description of the item, the other to write down this information.
For items that are hard to appraise, you should refer them to a person knowledgeable about that type of property. Where a third person estimates an item’s value, his/her name and address should be indicated on the form.
In addition to inventorying your property, you should etch, with a special etching device, your drivers license number on as many items and valuables as possible. The police have all your driver’s license numbers, old and new, on record so it is more helpful, and safer, than putting your social security number on them.
Irreplaceable antiques, works of art, and other valuables should be photographed or videotaped to give the police the best identifying information if they are lost or stolen. There are professional photographers that provide these services.
As you inventory and appraise you property, you may find the incentive to install double-bolt deadlocks on all your outside doors to prevent burglars from removing property if they manage to break in to your home. Some individuals install sealed, double-glass windows or wrought iron window guards, and/or plant cacti or thorny bushes in front of windows to make it more difficult for a burglar to gain access and remove articles from the home. In other countries, many apartments and residences are windowless from the street side, with all windows facing inward into well-protected courtyards. Utilizing some of these architectural concepts could prevent the loss of your personal property. This increase in security can also protect the most important thing in your life, your family. These improvements may also save you money on your homeowner’s insurance; ask your agent.
After completing the inventory, you need to prepare a reminder note, on your calendar or computer, that you need to update the forms at least once a year. You may update them when you receive your annual review letter from your attorney. This saves you money by reducing the items on the attorney’s Action Item List. You may do it after the year end holidays when many new items are acquired. Of course, when you purchase, sell or inherit major items, the list needs to be supplemented.