Most of us love the process of giving and receiving Christmas presents, however gifting someone an item in your will can prove more complicated than just a trip to the shops.
Your personal chattels are made up of many of the items that you have collected over your lifetime such as the contents of your house, personal items such as jewellery, and cars or even the Christmas Tree in the loft! Some may have significant monetary value and others may be more sentimental. For most people the value of their chattels will only form a very small proportion of their estate, however they are still very important to consider, as they can often lead to upset and arguments between family members if someone doesn’t receive something they feel they were ‘promised’ or of significant sentimental value to them.
There are several options available to you when gifting your chattels in your will:
- - You could leave your chattels to be distributed as part of your residue, however this can cause disputes between family members if it cannot be agreed how the items will be split, especially where sentimental items are involved.
- - You could gift chattels specifically in your will. This would mean that any changes you wished to make to how specific items were gifted would require a new will or codicil each time and could also lead to a very long list of chattels in your will.
- - You could leave all your chattels to a specific person in your will (usually the executor) and request that they are distributed in accordance with any separate letter of wishes that you have left with your will.
Just as Father Christmas regularly updates his ‘naughty’ and ‘nice’ list, creating a letter of wishes allows you the flexibility to make changes to how you wish to gift your chattels if your family, relationships, or items change. This also means that you are able to change your wishes regarding your chattels informally after the will has been signed, and so don’t have to have your will re-drafted or complete a codicil if you want to change anything. Whilst the executors are not legally bound by a letter of wishes, they will usually follow the instructions that you have provided.
Your executor will have to bear in mind that if your chattels are distributed as requested in your letter of wishes within two years of your death and are not being left to a surviving spouse or civil partner, then the gift will be transferred as if it were given under the will. This means that it will form part of the value of the estate for inheritance tax purposes, and so all chattels should be valued for their open market value before being transferred. If an item is worth around £500 or more, it is also best to ensure that it is professionally valued.
Whilst it is lovely for family and friends to have a lasting gift to remember you by, it is important to think about how you wish to gift these, to ensure that there are only happy memories associated with them.
So, as you hang those glass baubles you have lovingly collected over the years, have a think about who in the family shares your taste in Christmas décor and consider preparing a letter of wishes.
Please call us if you need any help or advice, 0800 84 94 101.