Many estate-planning attorneys use a personal property memorandum (memo) for the disposition of personal property. It’s used when the attorney drafts a client’s will to allow the client to change their personal property distributions after the estate plan has been formally executed. This practice permits the client to efficiently alter their personal property distributions without formally modifying their estate plan, saving the time and expense of meeting with their legal counsel to tweak their estate plan. As helpful as this practice may be in facilitating the changing wishes of the client, is it opening the door for unwanted risks to the client and their attorney? Possibly.
The Strategy
Including the personal property memo with the client’s will allows limited flexibility for the client to dispose of their personal property. To save the client from meeting with their estate-planning attorney every time they dispose of or acquire personal property, the memo permits the client to identify the change in property and modify who will receive (or no longer will receive) it on the client’s death. The memo qualifies its limited power, and the client’s attorney discloses the same at some point in the drafting or execution stages by stating that the personal representative isn’t required to follow the dispositive provision found herein. So, the personal representative can either follow the instructions in the personal property memo or choose not to follow the instructions. It’s generally presumed that the personal representative can pick and choose which memo instructions to follow. If a personal representative elects to follow only a few of the letter’s instructions, what happens to the remaining personal property? Generally, these assets will follow the will’s formal provisions for disposition.
Reference to Memo
In the section of the client’s will that disposes of personal effects, refer to the personal property memo. For example, you might say something like this:
If my spouse fails to survive me, I give and bequeath certain items of personal property in accordance with a memorandum signed by me, which I plan to leave with this last will and testament or among my other personal papers. I request my personal representative follow the distributions of the listed personal property to the intended beneficiaries to the best of their ability, knowing this request is precatory in nature and cannot be enforced by law. Furthermore, I request that the beneficiaries thereunder accept amicably the disposition of such articles of personal property. If I do not leave such a memorandum, or if there shall be any of said items as to which I have not made my wishes known on said memorandum, then the same shall form a part of my residuary estate and be disposed of in accordance with my last will and testament.
Sample Memo Language
The memo can take many forms and is often prepared in advance by the attorney to aid in its future development by the client. For example, the memo could say:
I request my personal representative follow the below listed distributions of personal property to the intended beneficiaries to the best of their ability, knowing this request is precatory in nature and cannot be enforced by law. Furthermore, I request that the beneficiaries hereunder accept amicably the disposition of such articles of personal property. My personal representative is given complete discretion in making the below listed distributions and the personal representative’s decision will be final as to the beneficiaries.
Personal Property Description
- 14k gold wedding ring.
- 2024 HP Envy x360 laptop.
3. ______________________________
4. ______________________________
Date: Jan. 23, 2025
By: Harvey A. Hutchinson Harvey A. Hutchinson,
Testator
Beneficiary
1. Courtney Hermes (Daughter)
2. Morgan Altra (Daughter)
3. _______________________________ 4. _______________________________
Potential Risks
Often, the client never uses the memo. The empty memo is found with the client’s estate-planning documents. An unscrupulous actor who has unfettered and unaccountable access to the client’s estate-planning documents may take the opportunity to complete the memo as they prefer or as they believe the client would want. Because there are few, if any, security measures (other than the signature of the testator or testatrix that may be subject to forgery) in place to complete the memo, and the memo may be administered outside the review of the probate court, the chance for fraudulent conveyances is great.
If the memo is used, it’s often outdated, and the client no longer owns much of the listed property. The listed beneficiary who was intended to receive the pre-disposed personal property is left confused and wondering if they should get something else in its place. After learning they won’t receive a substitute personal asset of equivalent value, they’re left feeling jilted and may begin questioning the legitimacy of the estate plan and its administration going forward.
Furthermore, if the client suffered from diminished capacity when completing the memo, and several years have passed after the estate-planning documents were drafted, could the memo become evidence in a court proceeding that the entire estate plan was invalid? Consider the following scenario: The client lists cartoon characters (for example, Charlie Brown or Daffy Duck) as beneficiaries in the memo and describes personal property the client has never owned. The memo will become Exhibit A to an unsatisfied heir or beneficiary who chooses to contest the will. Was this risk likely or foreseeable at the time of the memo strategy? Possibly. Should this risk, and the other described risks above, be weighed before using a personal property memorandum strategy? Yes, without question.
Limit Frequency of Use
Advise your clients to limit the frequency of employing the memo. The flexibility given to the client to change their mind in the disposition of the personal property is easily met with this strategy; however, the risks discussed above likely outweigh the cost savings and asset distribution benefits the strategy provides. Likewise, having the attorney engaged with the client when preparing the memo may prevent foreseeable and unforeseeable risks in its development, such as the hallucination example of naming cartoon characters as beneficiaries discussed earlier. Furthermore, the attorney could place an expiration date on the memo to ensure the client stays in contact with the attorney to keep the estate plan (or at least the memo) current and relevant. Nevertheless, additional safeguards and more communication between the firm and its clients should be made before continuing use of the personal property memo.
Harvey A. Hutchinson currently serves as a Lead Financial Planner with Brown Financial Advisory in Fairhope, Ala.
