This post contains Articles Six of a sample living trust agreement. My clients have asked me the same question frequently. To answer these questions, I dedicated BoomX Show episodes to answering these questions. I video taped the episode with my iPhone in the studio. These short videos are meant to liven up the tutorial with a BoomX feel to it. But, I admit, they are also far from professionally produced. The text of the sample Article is displayed below.
The most common question that arises when clients read this article is about the Personal Property Memorandum. This short BoomX style video answers, as best I can, that question.
Each of us may dispose of items of tangible personal property by a signed written memorandum executed after we sign this instrument. The memorandum must refer to our trust and must reasonably identify the items and the beneficiary designated to receive each item. If either or both of us executes a memorandum, our Trustee shall incorporate the memorandum by reference into this instrument to the extent permitted by law.
Our Trustee shall distribute the items of tangible personal property listed in the memorandum as promptly as practicable after the death of a Grantor who completed the memorandum, together with any insurance policies covering the property and any claims under those policies, as provided in the memorandum. If either or both of us leave multiple written memoranda that conflict as to the disposition of any item of tangible personal property, the memorandum with the most recent date will control as to that item.
If the law does not permit incorporation of the memorandum by reference, the memorandum will then serve as an amendment to our trust, but only to the extent this amendment solely disposes of tangible personal property. We request that our Trustee follow our wishes and distribute the items of tangible personal property listed in the memorandum according to its terms.
Our Trustee shall distribute any of the deceased Grantor’s remaining tangible personal property not disposed of by a written memorandum to the Survivor’s Trust to be administered as provided in Article One. If we are both deceased, our Trustee shall distribute the property as provided in the following Articles.
For purposes of this Article, the term tangible personal property includes household furnishings, appliances and fixtures, works of art, motor vehicles, pictures, collectibles, apparel and jewelry, books, sporting goods, and hobby paraphernalia. The term does not include any property that our Trustee, in its sole and absolute discretion, determines to be part of any business or business interest owned by the deceased Grantor or our trust.
After the death of a Grantor, if our Trustee receives property to be distributed under this Article from the deceased Grantor’s probate estate or in any other manner, our Trustee shall distribute the property in accordance with this Article’s terms. The fact that an item of tangible personal property was not received by our trust until after the death of a Grantor does not diminish the validity of the gift. If property to be distributed under this Article is not part of the trust property upon the death of a Grantor and is not subsequently transferred to our Trustee from the deceased Grantor’s probate estate or in any other manner, then the specific distribution of property made in this Article is null and void, without any legal or binding effect.
Until property distributed in accordance with this Article is delivered to the appropriate beneficiary or his or her Legal Representative, our Trustee shall pay the reasonable expenses of securing, storing, insuring, packing, transporting, and otherwise caring for the property as an administration expense. Except as otherwise provided in our trust, our Trustee shall distribute property under this Article subject to all liens, security interests, and other encumbrances on the property.
The deceased Grantor’s remaining property will be administered as provided in the following Articles.