In the realm of estate planning, the Personal Property Memorandum stands as a versatile tool offering convenience and flexibility, particularly in locations like Corona and Tustin, California. This document holds the key to seamless amendments without the hassle of redrafting your Will. California law, accommodating even handwritten alterations, elevates the Memorandum’s simplicity, making it a practical and easily accessible solution for individuals seeking to manage their assets effectively.
The Advantages and Risks of Personal Property Memorandum
A Personal Property Memorandum’s primary benefit is that it can be easily amended whenever necessary without requiring a new Will draft and execution. As long as the Personal Property Memorandum is signed, California laws permit even handwritten changes to a Memorandum, and a California probate court would uphold them. Therefore, a California Personal Property Memorandum is simple, practical, and “do-it-yourself.”
Nevertheless, a few serious risks are associated with using a personal property memo. This is due to the Probate Code’s Section 6132, which places extremely low fair market value restrictions on what can be included in a personal property memo. Every item on the list has a maximum value of $25,000 overall, and no single item can be worth more than $5,000. Items valued at more than $5,000 are especially risky because the California Probate court will not distribute them in accordance with the list, according to the statute. Instead, the Act specifies that the “remainder clause” in the shall shall govern how these things are dispersed. This implies that the gift will not be given to the intended recipient. Value inflation poses an additional threat. The individual writing a Personal Property Memorandum might not realize this, but “Grandma’s Wedding China” might be worth more than $5,000 or gain value after being included on the list, making it worth $5,000 or more. Therefore, even though “tangible personal property” is defined broadly in Section 6132 to include “jewelry, cars, boats, and precious metals in any tangible form,” such kinds of things shouldn’t be listed on a personal property memorandum.
Despite this, there are still benefits to employing an estate planning tool such as a Personal Property Memorandum. But only objects with minimal commercial worth should be allowed on the list. So, instead of saying “Grandma’s wedding china,” say “Grandma’s recipe box and contents.”
Ask an Estate Planning Attorney Today
While Personal Property Memorandum offers unparalleled flexibility, its utilization also presents potential risks, especially concerning fair market value restrictions outlined in the Probate Code’s Section 6132. Understanding these nuances is crucial for crafting an effective estate plan that safeguards your assets and honors your intentions. For personalized guidance tailored to your unique circumstances in Corona, Tustin, or beyond, contact Hudack Law Estate Planning Attorney and areas of service. We proudly serve California and Arizona; please call our California line at (877) 314-4309 or our Arizona line at (602) 777-7882.