Personal Property Disposition Strategies

The following excerpts are from Rachel Emma Silverman, How to Keep Peace Among Heirs, Wall St. J., April 18, 2007, at D1:

Distributing a family’s tangible belongings — often mundane knickknacks with far more sentimental value than monetary worth — has long had the potential to ignite family feuds. Divorce and second marriages can add to the tension, as children and stepfamilies vie for valued objects.

Now, families and estate planners increasingly are turning to a number of novel strategies, including family auctions and a round-robin selection strategy, to divide tangible property without splitting families apart. Recent online tools also can help family members divide up a parent’s belongings.

Poor advance planning can cause much of the friction. In many wills, parents simply leave their possessions to their children, without specifying who gets what. Also, people often make informal, oral promises to heirs over the years. * * *

Estate planners say family auctions are generally highly effective as long as everyone agrees to the rules beforehand. Mr. Scroggin, the lawyer, says he helps families with such auctions about five times a year. Most of his clients do silent auctions, in which family members submit bids on assets that they want, but don’t see what other heirs bid. The highest bid price is then deducted from the bidder’s inheritance.

Other families turn to a round-robin strategy, says Martin Shenkman, a Teaneck, N.J., estate lawyer. Heirs draw straws and whoever wins gets to pick out items they would like to have, often in a particular room. On each round, a different heir gets to choose first. Some families choose to appraise the items beforehand so that each family member is aware of the value of the assets they choose, says Mr. Shenkman.

As a first step, estate planners recommend that families get together to talk about who wants what while everyone is still in good health. If more than one heir wants the same thing, the parents can have the ultimate say. This also gives parents a chance to explain the history of family heirlooms so the stories behind the objects aren’t lost.

“The ideal is having the conversation in advance, asking kids what they want and why, and finding out what is meaningful,” says Marlene Stum, professor of family social science at the University of Minnesota, who has conducted research on property distribution. The university has created a program called “Who gets Grandma’s Yellow Pie Plate?” which includes a detailed workbook, video and Web site, with pointers to help families discuss property distribution. * * *

Another tactic is for either the parent or the children to label objects in order to designate who gets what. But beware that labels can fall off, or can be moved by unscrupulous heirs.