Gifts with reservation - Personal Possessions

Sea_Shell

Can you gift someone an item whilst you're alive, but keep it in your possession (to enjoy/wear), but which will then pass directly to them on your death, outside your estate?

Fully documented of course.

Rather than having to make specific bequests in your will (or intestacy), or cause any arguments about "liquidising" everything and splitting cash.

Not necessarily anything of any real value.   I understand anything that was valuable would still have to be added "back" into the estate in respect of IHT.

user1977

In theory yes, but if you think there are likely to be arguments caused then I'm not sure this is going to avoid them.

MarzipanCrumble

umm - I experienced this.  Bear in mind I was estranged from my parents who had moved to Australia to be with my sister (long story but shows aminostity).  

I, in my 20's, had desired a certain silver necklace which my mother loaned for a specific event then got back.  But she noted my desire and in a letter of expressed wishes left me it after her death.  I know that this was dependent on executor approval, but on her death I reconciled (sort of) with my family and inherited the necklace plus a couple of other items. 

So - I suppose if you leave an item specifically in a will it may or may not be given to the named (depends if it is still there).  In a letter of wishes - well that can be ignored, can't it?  The letter will depend on the goodwill of the executor/family.

(PS The more I read this whole Death/probates Forum the less confidence I have in wills because they can only be enforced if a dispute by loads of money to pay the court costs.)

BooJewels

Please don't assume that's the case @MarzipanCrumble - I expect that the vast majority of Wills are executed exactly as the testator hoped - we tend to hear of the worst, extreme cases here. I've been executor 4 times now and carried out everything in the Will to the letter.  My sister was co-executor with me for 3 of them and we'd often discuss "what would they like us to do" and took courses of action that we thought they would have done - like gifting things to neighbours who had been good to them etc.  I think perhaps the most significant factor is choosing your executors well - people who understand you and that you totally trust to do the right thing.

In respect of @Sea_Shell original question - my husband and I each have a side letter with our Wills - we wrote them ourselves and signed them and the solicitor put them with the original Wills.  My husband wanted some of our son's friends to have a watch each from his collection, in acknowledgement of acts of importance they'd done at some point in the past - no-one but us knew anything about it.  By the time he passed, his collection had changed and my son and I sat down and reallocated them a little, to best suit the individuals, from the new selection - they all got a bit of an upgrade, plus an additional one we thought worthy.  So whilst it wasn't adhered to strictly accurately, I am comfortable that his intention was wholly fulfilled. Had he allocated something specific to an individual because they liked it or some such, then that would have been what they'd got - no question. 

Brie

My mom wanted to avoid arguments so asked us all what we wanted that was in her house.  Bro1 gets the piano (he plays), Bro3 gets the guns (he hunts), Bro2 gets specific artwork (he's an artist) and I also requested 2 specific paintings I admired.  All of these have been noted along with other items and essentially things have a "label" on them to say who it belongs to.  As my mom has now been taken into care and we are clearing her house we are a bit ahead of the game and taking some stuff to our own homes and selling or donating other bits.  

Strangely a solicitor said to us at one point "I don't want to know the details but you know when your mom dies anything of value in the house will be assumed to be hers so you might want to have a plan to clear some of it before someone comes in to value things."  It turns out it doesn't matter in a lot of ways as many items that were always assumed to be highly valuable (paintings, silver, jewellery) are so out of fashion that auction houses aren't the least bit interested in them.  

BooJewels

I'd forgotten about labels @Brie - my M-I-L did that - I inherited a little cupboard of hers with my name on a label on the back.  It's on permanent loan to my son at the moment, as he had a perfect spot for it and I did instruct him not to remove the label.  It had been a running gag for about 40 years and judging by the colour of the label, it might well have been on there the entire time.

You're also correct about things not having the value you think - we ended up leaving 'aniques' in my parent's house for the clearance people to take, as we just couldn't find homes for them - most of the auction houses that visited were just tyre kickers that knew less than me. Lots of lovely small pieces of silver that I've ended up keeping because I wasn't prepared to sell 150 year old silver teaspoons for scrap value. So I stir my tea with them instead.  The one auction house that we left stuff with got so little for items after fees that I feel pretty dirty about it.  

Sea_Shell

Yes, labels.  That's sort of what I meant.

I was thinking that a labelled (or documented) item could be made more binding, without having to be specified in a will, by "gifting" with paperwork, rather than a letter of wishes.

poppystar

BooJewels said:

I'd forgotten about labels @Brie - my M-I-L did that - I inherited a little cupboard of hers with my name on a label on the back.  It's on permanent loan to my son at the moment, as he had a perfect spot for it and I did instruct him not to remove the label.  It had been a running gag for about 40 years and judging by the colour of the label, it might well have been on there the entire time.

You're also correct about things not having the value you think - we ended up leaving 'aniques' in my parent's house for the clearance people to take, as we just couldn't find homes for them - most of the auction houses that visited were just tyre kickers that knew less than me. Lots of lovely small pieces of silver that I've ended up keeping because I wasn't prepared to sell 150 year old silver teaspoons for scrap value. So I stir my tea with them instead.  The one auction house that we left stuff with got so little for items after fees that I feel pretty dirty about it.  

Ditto on the auction house issue. I brought a lot of stuff back with me rather than leave for clearance because I’d seen similar go at auction when I was doing my research. So little for the first few items I took that the remainder has largely gone to Oxfam or Scope. If they get more for it and I lose out a bit then so be it. I was so disgusted with the first auction house that raved over a couple of lots and then got a couple of pounds for them. They did awful photos, almost hiding the best bits (I had to wonder if it was intentional) and failing to describe the items correctly - all of which is so important now the auctions are largely online. No more business from me and I had been looking forward to getting some money for the items as I felt I’d be doing things how my parents would have wanted - daft I know. I’m not keen on selling online myself but I’ve certainly learnt a lesson about auction houses. The clearance people were so nice that if they have managed to get money for things I left there then I am happy for them too. 

I’d have loved to have also been left a letter of wishes as there are so many decisions to make when dealing with years of accumulated possessions that I’d have been relieved to have had an indication of what they would have wanted done with much of it. Of course, my own letter of wishes is still a work in progress🙄.

BooJewels

My husband and I had a conversation with his Mum a few years ago after a friend of hers died and something she'd been promised never surfaced and that she didn't think the deceased would have enjoyed the funeral much either. 

So we suggested then that she either wrote some sort list or put labels on things and perhaps write down what she wanted at her funeral and we'd honour it all.  I saw a nice leather notebook soon after, so got it for her and told her to write things down in that.  A little while later she showed us the book and just flipped through the pages, enough that we could see she was certainly writing things down in it. She showed us where she kept it for when the time came. 

My husband pre-deceased her and she then made her other son her executor and when she died I told him about the book - which she had too - and he found that and some letters she'd left to be given to people - so she did keep up with her notes and my B-I-L, despite my considerable reservations, did her proud and did actually honour all of her wishes.  He did comment that just about every ornament and picture had a label on it.

So, if you trust your executors and immediate family, that should suffice in ensuring that your wishes are honoured in that respect.

Brie

Sea_Shell said:

Yes, labels.  That's sort of what I meant.

I was thinking that a labelled (or documented) item could be made more binding, without having to be specified in a will, by "gifting" with paperwork, rather than a letter of wishes.

Labels are helpful if you have 6 large tables or similar to differentiate.  But having a list with a bit of a description also helps particular when like our family you're spread across a large area (8 time zones for us).  Add to that I'm currently supposed to be putting together a list of jewellery complete with pictures of items.  First thought is that nieces and nephews may be interested in having stuff as a keep sake despite having never seen the items.  Second is that it makes it handy to shop/email to someone who might be interested in buying.

I have little respect these days for auction houses.  I used to do a lot of casual buying from auctions and selling on and discovered one place in particular had ringers driving up the bids.  I don't think it's an isolated situation.