A new statute taking effect on July 1 will finally cause memorandums of personal effects to be legally recognized, but the statute is not without drawbacks.
A memorandum of personal effects is separate from, but related to, a client’s last will and testament. It allows the client to dispose of tangible personal property at death, but in a less formal manner. The client simply makes a list of items and the persons who should receive them. Because the list is not a part of the will, it does not need to be executed with the formalities of a will. Therefore the client can update the list as often as he wants without having to consult his attorney or execute a new will. In addition, because the list is not part of the will, it generally can remain private.
Although estate planners have long used such memorandums with their clients, there has always been a question about their legal enforceability. Typically, a memorandum of personal effects is implemented via a direction in the will. The direction tells the executor to follow any memorandum of personal effects that the client may leave behind. Because these memorandums are not normally incorporated as part of the will, and they are not executed in the same manner as a will, they are generally not considered legally binding.
The new law, described at Section 11 of SB 0769, makes memorandums that meet certain requirements admissible to probate and thus legally enforceable. In order to be admissible, a memorandum must:
- Either be in the handwriting of the testator or signed by the testator;
- Be dated; and
- Describe the items to be distributed and the beneficiaries thereof with reasonable certainty.
There is no requirement that the memorandum be in existence prior to the will. Also, the testator may update the memorandum from time to time, provided that the testator signs and dates the alteration. If more than one memorandum exists, the later version revokes the prior version or versions to the extent of any inconsistencies.
A personal representative cannot be held liable for distributing items contrary to a memorandum but in a manner consistent with the will, provided it did not have actual knowledge of the memorandum. In addition, the personal representative will have no duty to recover such wrongly distributed property.
Note that if a memorandum is admitted to probate, it becomes a public record. Moreover, each recipient* of an item distributed in accordance with the memorandum must file a receipt with the probate court. The lack of privacy and potential extra burden on the personal representative undercut the value of the statute.
* The use of the term “recipient” is interesting. It suggests that only persons who receive an item from the list must file a receipt, rather than everyone who is listed as a beneficiary. Presumably, the purpose of this language was to keep the the personal representative from having to obtain receipts from beneficiaries of items that could not be found or identified. However, one wonders if the probate clerks will implement the receipt requirement in this manner.
UPDATED TO ADD: The rules above are codified at T.C.A. § 32-3-115.
Previous posts on SB 0769:
Source: SB 0769 (pdf)
Posted by Joel D. Roettger, JD, LLM, EPLS