Chattels - Fern Wills & LPAs

Most people accumulate a great deal of ‘stuff’ throughout their lives. Some items are valuable in real monetary terms, while others hold sentimental value. Much of this personal property falls under the definition of ‘personal chattels’.

Personal chattels are broadly defined as all ‘tangible moveable property’ other than property used solely or mainly for business purposes or held as an investment.

When it comes to dealing with personal chattels in the will, there are a few options available:

They could be left to the residue (what is left after other gifts are given) to be distributed, but this could cause disputes between family members. Disputes about the destination of chattels can often turn bitter, often because of the sentimental value attached to them.
The chattels could be explicitly gifted in the will, but making a long list of chattels and their recipients may be impractical. It is also impractical for the testator (owner of the Will) to write a new will every time they wish to change the destination of a chattel or add or remove a chattel or beneficiary.
Leave all the chattels to a specific person, usually the executor, and request that they distribute them according to a separate letter of wishes left with the will.

The third option is the most flexible for the testator because it allows them to keep an up-to-date list of chattels and beneficiaries. This list can change as their possessions, wishes, or family circumstances evolve. The testator can modify this list even after the will has been signed, and it does not require any formalities. This approach eliminates the need to redraft the will if the testator's preferences regarding their chattels change.
When Fern Wills drafts a Letter of Wishes, we provide a paper copy to be stored with the will, a watermarked copy for your records, a PDF electronic copy, and a Word document electronic copy. The Word document can be easily updated as needed.

When drafting a will, there are several important considerations to remember. First, Fern Wills & LPAs do not reference a specific letter of wishes as existing at the time the will is executed. Doing so could incorporate that letter into the will, meaning you would need to re-execute the will with any changes to the letter. Instead, we generally refer to it as "any letter of wishes left by me" rather than "my letter of wishes dated [date]."

Consider whether the clause you use to define the chattels needs expanding to cover any chattels used for business purposes or held as an investment, as the statutory definition excludes these.

Fern Wills encourages clients to make sure the items described in the list are clearly identified, as this helps avoid arguments. We also ask clients to destroy any old lists if they write a new one, again to avoid unnecessary arguments after their death.

Finally, we always ensure that clients understand the pitfalls of this approach to dealing with chattels. Legally speaking, the will absolutely gifts the chattels to the nominated person and only expresses the wish that they distribute them accordingly (hence the term precatory trust, from the Latin' precari' to pray’). In theory, this person could take the chattels for themselves as they only have a moral obligation to distribute. In practice, though, this rarely causes an issue when the items are left to the executors and a clear letter of wishes is discovered.

Tips:

Fern Wills can include clear details in the Will to specify how Inheritance Tax, insurance, Transport etc are applied to each gift. This ensures a smooth transition of ownership without stress or family disputes. Without this direction, the default position is for the beneficiary to pay for transport, etc. If the will includes no direction on who shoulders the cost of transport, packaging, and insurance of specific items then the default is that it is the beneficiary receiving the gift who is responsible for paying these costs and not the estate.

Consider a fallback position. For example, if a son predeceases you, would you want the gift to go to his children, pass to another of your children, or go to the residue?

Copy and store insurance documents, photos of items, receipts and other details in professional storage with your Will.

EXECUTOR tips for chattels

When managing an estate, the initial step is to assess the value of personal belongings, as these are included in the estate for Inheritance Tax considerations. It is recommended to seek a professional valuation for items valued at £500 or more to ensure compliance with your responsibilities as the executor or administrator. This assessment should represent the fair market value at the time of the individual's passing.
Verify if the deceased left behind a Letter of Wishes that addresses specific items or if any items have been designated for particular beneficiaries. If such guidance is present, you can distribute those items accordingly. It is a good practice for the executor or administrator to obtain receipts from beneficiaries for any items that are distributed.
In cases where personal belongings are not addressed in the Will, they may be sold, and the proceeds should be allocated based on the stipulations in the deceased's Will or, if there is no Will, in accordance with the intestacy laws.