California Estate Planning: Use and Limits of a “Personal Property Memorandum”

California Estate Planning: Use and Limits of a "Personal Property Memorandum"

Under California probate laws, a person may use what is commonly called a “personal property memorandum” to direct disposal of smaller personal items and assets after passing. See California Probate Code, § 6132.

A Personal Property Memorandum can be thought of as an Exhibit attached to a California Last Will and Testament that directs how various smaller items of personal property are to be distributed and to whom. A Personal Property Memorandum is used as a substitute to having a long list of specific bequests in the main text of the Will. Often, specific bequests have emotional and sentimental value to the person gifting the items. Examples of such personal property bequests might be “Grandma’s wedding china,” a stamp collection, or a set of antique woodworking tools. Such lists are effective under Section 6132 of the Probate Code if these conditions are met:

  • An unrevoked will refers to the writing;
  • The writing is dated and is either in the handwriting of or signed by the testator; and
  • The writing describes the items and the recipients of the property with reasonable certainty.

The main advantage to using a Personal Property Memorandum is that it can be changed with ease and as often as a person wants, WITHOUT having to re-draft and re-execute the Will. Indeed, under California rules, even hand-written revisions to a Personal Property Memorandum are allowed and will be enforced by a California probate court (as long as the Personal Property Memorandum is signed). In this sense, a California Personal Property Memorandum is easy, convenient, and “do-it-yourself.”

However, there are some severe potential dangers to using a Personal Property Memorandum. This is because Section 6132 of the Probate Code imposes VERY low fair market values on what can be listed on a Personal Property Memorandum. The total value of all items cannot exceed $25,000, and the value of any one item on the list cannot exceed $5,000. There is a particular danger with items exceeding $5,000 in value since, by the statute, such items will NOT be distributed by the California Probate court pursuant to the list. Rather the statute states that such items will be distributed pursuant to the “remainder clause” in the Will. This means that the person designated to receive the gift will not receive the gift. The other danger is value inflation. It might not occur to the person drafting a Personal Property Memorandum, but “Grandma’s wedding china” might actually be worth more than $5,000 (or might appreciate in value after being added to the list so as to become worth $5,000 or more). So, despite the fact that Section 6132 broadly defines “tangible personal property” to include “… automobiles, boats, and jewelry, as well as precious metals in any tangible form …” those types of items should NOT be included on a Personal Property Memorandum.

That being said, there is still value in using a Personal Property Memorandum as an estate planning mechanism. However, the items on the list should be strictly limited to things of small commercial value. So, “Grandma’s recipe box and contents” rather than “Grandma’s wedding china.”

Contact Our Experienced Irvine, CA, Estate Planning Attorneys

For more information, contact the Irvine estate planning attorneys at Guardian Litigation Group. Our Mission is to provide unparalleled Estate Planning legal services for our clients. We can be reached via our contact page or by phone at (949) 444-5474. We are located in Irvine, California.