Personal Property and Your Living Trust: From Coffee Mugs to Classic Cars
Most people create a revocable living trust with their house and bank accounts in mind, then freeze when it comes to tangible personal property. What about grandma’s jewelry? The art collection? That vintage motorcycle in the garage?
Thankfully, funding your trust with personal property is more straightforward than most people think.
The Household Items Safety Net
Let’s start with a bit of reassurance: if you failed to transfer every dish, book, and piece of clothing into your trust, you aren’t out of luck. Washington law recognizes the “pour-over will,” which works alongside your trust to catch assets you didn’t specifically transfer. For most household items, this safety net works just fine, though it may require a small estate affidavit, an extra little step in the estate administration process.
The key distinction lies in Washington’s probate thresholds. If your personal property (whether community or separate) exceeds $100,000 in total value, a formal probate proceeding may be required rather than the simpler small estate affidavit procedure. This makes proper trust funding particularly important for valuable personal property.
Focus on items with significant monetary value, sentimental importance that could spark family disputes, or special titling requirements. These deserve individual attention.
What to do with High-Value Items
For valuable personal property—fine art, antiques, expensive jewelry, classic cars, or serious collectibles—take a more formal approach. These items should typically transfer directly into your trust through proper assignment documents.
For items without formal titles, you can use a Personal Property Assignment to transfer ownership from you individually to you as trustee. These assignments can target specific items but typically can be used as a blanket statement to transfer all untitled assets, like jewelry, artwork, clothes, and furniture. A Personal Property Assignment can also help avoid the need to do a small estate affidavit for those remaining household items discussed above. Your estate planning attorney can help prepare this type of document.
How to handle vehicles such as cars, boats, and RVs comes with some uncertainty due to the existence of formal title documents. In most cases, an Assignment of Personal Property will work just fine. In the case that the Department of Licensing won’t accept the Assignment, a small estate affidavit can be used to transfer or sell vehicles totaling under $100,000 of value. However, issues may arise when the total value of the vehicles is above $100,000. In those cases, the safest way to get a vehicle into the trust is to work with the Department of Licensing to change titles from your individual name to your name as trustee. Though this process is straightforward, it may trigger a title transfer fee and may require adding the trust as an insured party to your car insurance.
Business Equipment and Professional Tools
Business equipment and tools used in your trade deserve careful consideration. Mixing business assets with your personal trust can create tax complications and blur important legal distinctions.
Consider whether keeping business equipment in your individual name or in a separate business entity might provide better liability protection and clearer tax treatment. If you have assets like this, speak to your estate planning attorney to determine the best approach based on your specific business structure and objectives.
Practical Tips for Personal Property Funding
It is worth your time to take an inventory: Start by listing out items worth more than a few thousand dollars or carrying significant sentimental value. Take photos and document current values. This serves multiple purposes: helping you decide what needs special attention, providing valuable information for your successor trustee, and supporting insurance claims.
For collectibles and art, consider professional appraisals. Beyond insurance benefits, appraisals provide your trustee with essential information if items need to be sold during estate administration.
Don’t forget digital assets. While your Facebook account doesn’t need trust funding, valuable digital assets like cryptocurrency, domain names, or digital media collections might require specific attention.
Using Personal Property Memoranda Effectively
Everything so far has been about how to get things into the trust; but what about getting them to the right people? Washington allows you to create a separate personal property memorandum that works with your trust to distribute specific items. This document doesn’t require witnesses or notarization, making it incredibly flexible—update it whenever you want without involving your attorney.
Personal property memoranda excel at directing vehicles, jewelry, artwork, and family heirlooms to specific beneficiaries. While some trusts include dollar limits for items distributed through memoranda, many Washington trusts are drafted without such restrictions, providing maximum flexibility.
The beauty lies in specificity without cluttering your main trust document. You can ensure your daughter receives grandma’s engagement ring, your son inherits the family photos, and your nephew gets the golf clubs—all without creating formal trust amendments. In the long run, this will save you money and time.
Trust Funding is a Continuing Process
Trust funding isn’t a one-time event. As you acquire new valuable personal property, consider titling it in your trust name from the beginning—it’s easier than transferring later.
The goal isn’t perfection. It’s creating a system that accomplishes your objectives while minimizing complications for your family. Most personal property issues resolve through careful planning and clear documentation, even if every item isn’t formally transferred into your trust.