[WSBAPT] Hello/TPP clauses

Fri Jun 17 15:56:08 PDT 2022

Diane,

Early in my career I got brought into the Stupidest Fight Ever over tangible personal property. (If that doesn’t make 13 people reply with their “More Stupidest 😉 Fight Ever” experience, I will be very surprised.)

I then drafted my own custom TPP provisions. And I tell my clients about them during a draft delivery. And do all I can to get them to handwrite key items on TPP memos. Or to give key items away that they do not need any more and that they know may cause an issue – and then to memorialize to me that they did so and intended to. (Gooood luck, later contestant of lifetime gift!)

And then I tell them again about the TPP rules and memo again after signing everything weeks later.

My own view is that whoever wrote the paragraph 984 years ago that says people will divide the property into roughly equal shares or ANY language referring to “equal” or “proportional” or the like, just didn’t apparently ever deal with TPP: it cannot be divided into equal, proportional, etc. shares – it’s logically impossible. (Equal/proportional division based on what? Size? Weight?FMV? Original cost? Impossible To Obtain Anywhere In The Universe Appraised Value? Honestly, with respect to thousands of other lawyers’ default language, I truly do not “get it.”)

The proceeds of a house or car sale can be divided into any number of shares, and at most a few people are left with (literally) one cent less than a few others. But you cannot cut up a grandfather clock, or t-shirt, or (I hope!) a ring or watch or favorite bureau.

So, in my view, the issues and general approach with TPP are this:

  1.  Any items that will not be taken OFF THE TOP, i.e., at $0, must be identified and VALUED before the division begins. Once the division begins, those values do not get to change. If something must be appraised or “whatever,” then so be it – go do it – first. It does NOT get revised or changed later – that is begging for a fight.
     *   The valuation can be agreed upon by reasonable individuals working together, and, if they cannot agree, the PR or Trustee can state a value and that’s it. If the PR/Trustee states an indefensible or unreasonable value, well, then, they’re going to go to court and lose. So I tell them that far in advance of the day of division of TPP.
     *   In most cases, this (thankfully) leads to the valuation of very few items of notable value. In very rare cases, it leads to valuation of anything worth over about $5 or $10; but, hey, if that gets the job done, and they all feel “fairly treated,” what on earth do I care?
  2.  The beneficiaries then divide into “piles” all items that only one person wants. In other words, the easy stuff!
     *   During this process, they set aside any item that two or more people want (unless of course that subset comes to a decision amongst themselves – all friendly agreements encouraged, especially once they all know all these rules before ANY of the above begins).
  3.  And now it’s time for the pile set aside. Everyone involved still draws a number from a hat. They then take turns starting with 1 and take an item.
  4.  In the end, they sign a simple paper that says they have conducted the division and each person has received the TPP to which they were entitled and they have no claim to any tangible personal property that they do not have in their possession (or have not entrusted to storage/safekeeping by some other person, which is at THEIR risk, not the third party’s or PR’s).
  5.  The PR delivers to my office or emails me a list of the items identified in step 1 and the taker of that item so we can account for it.

Have never had a problem since. It is the FIRST major issue I ask every fiduciary to handle – while people are in town for the funeral and while they’re still getting along and don’t know yet that they dislike each other. TPP is the EASIEST hammer with which to bang a hapless PR on the head later in a case. EVERY time a set of heirs leave it unresolved for later there is some complication or “issue” – but that’s probably because they left it for later knowing that it was going to be an “issue” anyhow.

In some cases, I send a letter to the beneficiaries on behalf of the PR/trustee laying out the process, so that they cannot go to court later and say they had no idea, opportunity, whatever. If they show up and participate in the division, I think it’s like “notice” in corporate law and civil rules: appearance and participation is waiver! You got the letter, you showed up, sorry, you don’t get to challenge the rules or valuations later or after the fact. (I have not had to vindicate my view in court. I’ll let you know how that works out if I ever do! 😉)

It’s all stated in my documents more legally than the above, of course, because my attempt above is to help others think of how “if you knock off those key issues,” then you’re limiting dramatically the kinds and number of fights you ordinarily can have.

Plus all the language about an adult standing in for a minor or incapacitated person and such things.

That’s the rough outline. Hope it helps! Best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>
www.mckarcherlaw.com<http://www.mckarcherlaw.com>

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Diane J. Kiepe
Sent: Friday, June 17, 2022 4:19 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Hello/TPP clauses

Hello – here I am again – it seems when I ask a question, a flood gate opens.

I am having more and more fights over Tangible Personal Property division and honestly it’s making me want to quit law – ah but I digress.  In all seriousness, do you have language that you have seen work really well – honestly, I’m thinking of adding coin flipping by unrelated parties – it’s really getting out of control.

Diane J. Kiepe

Diane J. Kiepe
Douglas Eden
717 W. Sprague Ave.
Suite 1500
Spokane, WA  99201
djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>
509-455-5300

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