9 June 2022 by Raveena Dhindsa

What will happen to my personal belongings when I die?

When preparing your Will, you may be asked what you would like to happen to your ‘chattels’ (or personal belongings). Careful consideration should be given to this question, to avoid any dispute, misinterpretation or anguish.

So, what are personal chattels?

Your personal chattels are your personal belongings which are physical and moveable, other than your money, property owned solely or mainly for business purposes and property held solely for investment purposes.

How can I deal with my personal chattels in my Will?

Specific gifts  – If you have a desired recipient in mind for a specific item, you can make a specific gift of that item within your Will.

For example, “my diamond ring to my daughter, Elizabeth.”

It is also advisable to consider a substitute beneficiary if your chosen beneficiary were to predecease you. For example, you may wish for your daughters’ children to inherit the ring if she were to predecease you, and this should be included.

Letter of wishes – An effective way to ensure that you are able to finalise your Will without deciding how to deal with your personal chattels is to leave them to your executors for them to distribute in accordance with a Letter of Wishes you have written.

This allows you the flexibility to update the letter during your lifetime without changing your Will. It also ensures that your wishes are kept private from your Will itself.

Your Letter of Wishes does not need to be particularly formal, but it should contain your updated wishes, be dated and signed and stored with your original Will.

What costs are incurred in dealing with your chattels?

Insuring and transporting – Any costs incurred in insuring and transporting the item to the recipient are payable by the recipient unless the contrary is set out in your Will. Thought therefore needs to be taken if the item needs to be transported to avoid a situation where a beneficiary is pleased to have been left your item but is disgruntled and disappointed to pay the insurance and transportation costs.

Inheritance tax – Your personal chattels form part of the value of your estate and can therefore be subject to inheritance tax.  Your residuary estate will bear the burden of the inheritance tax but if you wish for the recipient to pay any inheritance tax due, this will need to be set out in your Will.

Clearance – If your personal chattels have been left to your executors to distribute in accordance with a Letter of Wishes or form part of your residuary estate and the item is not wanted by any beneficiary, the executors may gift these items to charity or arrange for their disposal. If the disposal incurs a cost, this is payable by the estate.

However, if a beneficiary is gifted multiple items and they do not wish to retain all items, they will own these items and will be liable for the cost of the clearance of the items unless your Will says otherwise.

Do I need to deal with my personal chattels in my Will?

If your Will is silent on the issue of your personal chattels, they will form part of your residuary estate.

If you have one residuary beneficiary, all your personal belongings will be gifted to them.

If you have more than one residuary beneficiary, your personal chattels will be divided between them without any guidance as to how. This is where family tension often arises.

A family member may remember a conversation you had with them, where you expressed your desire to pass that item to them. If this is not formally set out, a dispute could follow.

Even if your personal chattels are of little monetary value, they are often the items which hold the most sentimental value.  They should be given the same amount of consideration as your other assets when drafting your Will.

If you require assistance in relation to your Will and the inclusion of your personal chattels, please contact Raveena Dhindsa in our Wills & Wealth Planning team.

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