By Laura Colville, Tax, Trusts and Estates senior associate at Irwin Mitchell
It’s a joy to receive a gift but we’ve all had an experience where the gift we’ve been given has not quite hit the mark.
When receiving gifts as part of an inheritance, there are a range of issues that can arise and no opportunity to pop to the shop for an exchange in the January sales! Probate specialists will confirm that beneficiaries (or disappointed beneficiaries) can experience extreme emotions and that dealing with a deceased person’s personal belongings can often be the cause of the most heartache.
In my personal experience, I have seen two sisters screaming at one another over the contents of mum’s underwear drawer, and a son insist on having his father’s recycling boxes shipped to South Africa (until I pointed out to him that they were actually owned by the council). Not only does this sort of behaviour damage family relationships after losing a loved one but it also racks up legal costs.
How do we avoid such unfortunate circumstances? It is important when we take instructions for a Will that we discuss what happens with personal belongings, also known as ‘chattels’. The term chattels includes a person’s vehicles, jewellery, antiques, and even their pets.
In a Will, it's recommended to include a clause that leaves the chattels to a named recipient and there is then the option of directing that named recipient to distribute the chattels in accordance with a Letter of Wishes that is kept up to date by the person making the Will. The Letter of Wishes should list the chattels (using as much detail as necessary in order for the Executors of the Will to be able to identify the item) and then name the beneficiary.
The Letter of Wishes is not legally binding but provides guidance to the Executors as to how they should distribute the personal belongings. As the Letter of Wishes isn't legally binding, it can be updated without needing to alter the Will which means there is no cost. For example, should the person making the Will choose to gift some items during their lifetime, they can simply update their Letter of Wishes to reflect this. They could also change their minds about who gets what, for example if a new grandchild arrives on the scene and they would like to leave an item to them.
Sometimes, a gift can be unwelcome. An example of this is one that recently arose in a probate matter where the deceased left her horse to a friend knowing that the friend would have to put down the horse. Although the friend was willing to do this (she was a horse lover and understood that the horse was very poorly), she was not prepared for the cost involved.
It's particularly important when gifting pets to consider whether this should be supplemented by a financial contribution for ongoing costs of care such as food and vets bills. It should be noted that most animal shelters only have a finite number of places for animals and it is recommended that a person choosing to leave their animal to a shelter finds out more information about the shelter and their procedures before including this wish in their Letter of Wishes.
Without a chattels clause in the Will, the personal belongings will form part of the residuary estate. This may well be what the person making the Will wants. However, there is then still the same problem of who gets what and family arguments can often ensue.
Therefore when making a Will do not under estimate the importance of carefully considering who receives which chattels and setting this out in your Will or Letter of Wishes.