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Tuesday, December 17, 2013

Does a share of the residue entitle you to receive household items?


More estate fights break out over personal items and household items than about money. This is because household items such as family memorabilia have irreplaceable sentimental value. However, many people don't leave specific instructions about these important mementos, leaving the beneficiaries to fend for themselves. A reader recently wrote to me to ask about her right as a residuary beneficiary when it comes to household items. Her question and my response are below.

"We have received my father's Will. The Will states that the residue of my dad's estate will go, share and share alike, amongst his wife, his children (my sister and I) and his adopted step daughter for their own use absolutely.
We were not allowed anything from the contents of the house which was full of souvenirs from my grandmother before she died 30 years before marrying his second wife. His wife will be selling the house. Do my sister and I have any rights? Would it be a good idea to have the will read by a lawyer being that we might not fully understand what it means?"

When you ask whether you have "any rights" I'm not quite sure whether you mean a right to personal and household goods, or rights with respect to the wife selling the house, so I'll cover both.

Although there are laws in place that govern how wills and estates work, they are subject to specific wording in a will. People seriously underestimate the value of certain words and clauses in wills, as proven by the number of folks who make their own wills without legal advice. Since you have a copy of your father's will, you can refer to the wording. Read it to see whether household and personal items are mentioned in a paragraph of their own. If so, that paragraph will determine whether you and your sister can have anything from the house. A lot of wills don't cover household items separately, though they should.

When household items are mentioned in a will, the will usually says something like "the items are to be divided among these beneficiaries as they shall mutually agree". This wording is important too. It means that there does not have to be a division based on dollar value. It means that the beneficiaries (all four of you) can agree as to who gets which household items, even if someone gets items that are more valuable than those received by someone else, as long as the four of you agree. Disputes are to be settled by the executor. However, if the word "equally" is used, then the items must be divided monetarily equally.

If there is no paragraph that specifically talks about what to do about household and personal items, then all of the items that your father owned will become part of the residue of the estate. As you have said, you and your sister are entitled to 1/4 of the residue each,so this could arguably include 1/4 of the household objects each. One of the issues you will encounter is the question of which items in the house belonged to your father, and which were jointly owned by he and his wife. Generally, items that were used by both of them in daily living are jointly owned. Items that were jointly owned by your father and his wife would now belong to her. You have specifically mentioned souvenirs from your grandmother, which in my opinion would seem to be your father's property and not joint property.

When personal and household goods form part of the residue of an estate, their dollar value becomes important. Valuation could be tricky, depending on the type of souvenirs your father had. The residue must be divided on dollar amounts, equally among the four of you, but there may be some wiggle room as to who gets which specific items.

You haven't said what the executor is doing or has done with household objects so far, but you might suggest that she follow the usual, recommended procedure of having all beneficiaries gather in the house on the same day to make a division. She should keep notes of who takes what, especially if the items are part of the residue of the estate. Remember though, the executor has a lot of power to make decisions about the specific assets of the estate, depending on the wording of the will.

Another part of the will that comes in to play at this point is the part that contains the executor's powers and authorities. Wills vary greatly in this regard, meaning that some are much more helpful than others. By reading this part of the will, you should be able to get an idea of how much discretion the executor has in terms of giving specific assets to individuals. Ideally, there should be enough discretion so that if either you or your sister wanted to have the house, or some of the items in it, the executor would have the authority to make that happen (as opposed to selling everything and dividing the money). 

If sufficient powers are given in the will, the executor may be able to carry on her duties pretty independently from the beneficiaries, and do things such as sell the house without your input or approval. Without those powers, the executor may have to obtain your permission for certain steps, such as selling the house. You or your sister could buy the house from the estate, using your 1/4 share as a down payment.

The estate lawyer, if there is one, works for the executor and probably won't be much good to you as a source of information. You certainly will not get any legal advice from him or her. However, there is nothing stopping  you and your sister from taking the will to a lawyer of your own for a consultation. Seeing a lawyer doesn't mean you have to start a lawsuit. 




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