What is a Personal Property Memorandum?
Under California Probate Code Section 6132, a Personal Property Memorandum (PPM) is a legally recognized document that allows you to list your tangible personal property and designate who will receive each item. It applies only to personal items, not business assets or intangible property such as stocks or cash.
Why Can Having a Personal Property Memorandum be so beneficial for you?
Having a Personal Property Memorandum as part of your California estate plan is extremely beneficial. It is a document you can draft, edit, or revoke yourself without needing an attorney. For example, you may decide to leave your watch to your granddaughter. Or you may want to give your wedding album to your great-grandson. You do not need to contact your attorney or schedule a meeting. You also avoid paying amendment fees to update your trust or will. Instead, you can simply draft or update your Personal Property Memorandum.
What Are the Requirements for a Valid Personal Property Memorandum?
The main requirements for a valid PPM include:
- our trust or will should clearly reference the possible existence of a PPM. This is an important point to confirm with your estate planning attorney. Most experienced estate planning attorneys will include this reference in the distribution section of your documents. They will also attach blank PPM pages for you to complete as part of your estate plan.
- The personal property memorandum needs to be dated and signed by the settlor or in their handwriting.
- The writing must describe the items and recipients with reasonable certainty. Avoid vague descriptions like “my gold earrings” if you own multiple pairs. Clearly identify the specific item being given. Always include the full name of each beneficiary. For example, use Amanda Brown instead of just Amanda. It is even better to include the person’s relationship to you. For example, Amanda Brown, niece, or Daniel Cole, grandson.
- No single item on the personal property memorandum may exceed $5,000 in value. Avoid listing any item that is or may later be worth more than that amount.
- The total value of assets listed in the PPM cannot exceed the sum of $25,000.
As mentioned before, the big advantage of a PPM is that it allows you to control the distribution of all your assets that, while lacking in significant monetary value, may have a lot of sentimental value. After you execute a PPM without involving a lawyer, you can later revoke it and create a new one.
There are more technical aspects to executing a PPM. When meeting with your estate planning lawyer to discuss or execute your estate plan, we advise you to request that they show you how to execute a personal property memorandum.
Conclusion:
Personal Property Memorandums work well for trust creators who want precise control over smaller possessions. They are especially useful for collectors or individuals with items of strong sentimental value. The important thing about PPMs is to be clear as to who the beneficiaries are and to what assets. This is especially true when you revise the PPM multiple times.