Gifts to VIP
Many of us have special sentimental items that we would like to leave to certain people (our very important people, or VIPs) when we are no longer here. If this is the case for you, it would be expedient for you document the items that you would like to leave to specific people. This is generally done in two ways, either you can specifically list each bequeath in your Will or you Will can refer to any gift provision list that you may leave. In the latter you can put this list in place at any time by stipulating clearly each gift and who is to receive each gift and date and sign this list and place this list with a copy of your Will.
By leaving such list you may then update it at any time by destroying the old gift list and putting a new one in place. So in essence, if someone annoys you and you no longer want to leave them their designated gift then you may easily remove the provision for their specific gift that you were going to leave such person by putting in place a new list.
During my career, I have found that people are either an advocate for a gift list or they are not. What I will say on this matter is that it is the one area where I see family quibble the most when their parents are gone. The more definitive you are in distributing your personal assets to specific people the better as it is often the little sentimental things that tear families apart rather than large monetary items that you leave behind.
Who receives mum’s diamond ring is often a contentious issue, together with who is to receive grandpa’s war medals and so on. The eldest son may feel he is entitled to them, but the youngest son with an interest in military history may be inclined to think he should be recipient of these medals.
I recall a case a decade or so ago where a commentator aged in his thirties passed away without a Will. A dispute occurred over his estate and proceedings were initiated in the Supreme Court of Victoria over his estate with the parties to the proceedings being the deceased’s partner and his parents. The most contentious issue that they were at loggerheads over was not the most substantial asset of the estate being a monetary component but rather the most cherished possessions, sporting memorabilia and private journals.
One of the things I dislike most about being an estate planning lawyer is when clients say “ they can sort it out between them, I will be dead and won’t be here so I don’t care what happens”. The reason I so despise this comment is because when you leave it to the executor to sort out which child gets what it can create enormous tension and animosity between family members. Let alone the strain and responsibility that you are placing on your executor.
Once close family relationships that took a generation or two to create can dissolve in an instant over something so simple as who gets a sentimental item that belonged to you. I implore you to think carefully about this when putting your estate plan in place and keep at the forefront of your mind, what sort of legacy you would like to leave behind.
I would assume the most important thing for you would be that if your family was a close family unit prior to your death you would like that to be retained subsequent to your death. If so, take the time to go through the personal items that you know mean something to your loved ones and do a VIP gift list. If you are so inclined ask them if there is anything they would like, they may really like something that you were not aware they liked.
I once acted for a dear client, a prim and proper lady in her mid eighties, who arrived at our initial consultation to discuss her estate plan with a three page list of gifts that she wanted to leave to her family and other VIPs. I vividly recall the list featured crystal, crystal and more crystal. However, I do admire her for sitting down so diligently and taking the time to document who she would like to receive her personal belongings.
In addition to leaving gifts of personal belongings to VIPs some people may wish to leave a monetary bequeath to certain people. Such monetary bequeaths are paid prior to the distribution of the balance of your estate. If you determine to leave five bequeaths of ten thousand dollars then fifty thousand dollars of your estate will be utilised in the first instance to pay these monetary before the balance of your estate is paid to the remaining beneficiaries of your Will.
It is also becoming more prevalent for people to leave gifts to charitable organisations, particularly if they do not have children, or as a reserve distribution in the event that all members of their immediate family pass away together. People may have a strong connection to these charities whether they have assisted family members or loved ones during their lifetime or they may resonate with the philosophies of the charity that they would like to leave a bequeath to.
When leaving bequeaths to a charity in your Will it is imperative that you list the full name of the charity, their Australian business number and address so that it is extremely clear which charity you wish to leave a bequeath to. With so many charities in existence today, some of which have very similar names it is crucial that they are adequately identified so that a part of your estate does not end up with the wrong charitable organisation.
There have been occasion where the executor or trustee of an estate have been found to have paid bequeaths to a charity in which it was not their intention to leave a bequeath, purely because the charity was not adequately identified and was confused with a charity with a similar name. A number of older Wills have passed my desk with bequeaths “to the lost dogs home”. It is all very well to leave such generous bequeath, however the contentious issue is that a quick glance on google will most likely identify that there are a number of lost dogs homes in existence. In such instances your executor may not be able to distinguish the specific charity this bequeath was intended for.
In addition, when leaving charitable bequeaths you may wish to stipulate whether the bequeath is to be used for the charity’s general purposes or if there is a specific program or project that you would like these funds to be used for.
Gift lists are often overlooked when putting your Will in place. It is often nice for your children and other loved ones to receive a specific gift from you upon your death, no matter what the monetary value of this sentimental item is. Leaving a gift list may also alleviate future conflict between relevant parties when you are no longer here particularly if there is already some element of friction within your family and in cases where some of your children do not get on well with each other.
Disclaimer: The advice provided in this blog is of a general nature only and you should always seek legal advice relevant to your own circumstances.