Voyager Insights

How to Spark Joy in the Lives of your Beneficiaries

When it comes to tidying up your house, it is advised that you only keep items that spark joy. This philosophy may be useful to baby boomers now in the process of downsizing their homes and those of us that have recently lost parents and are now cleaning out the home. I can attest to the challenge of not just deciding how to divide personal items among family, friends, and charities, but what to simply toss out.

But how do you spark joy in the lives of beneficiaries when it comes to the distribution of tangible personal property, instead of creating conflict that can tear apart the family.

Dividing items of financial value (stocks and bonds, cash, etc.) may pose only few issues, because there is a clear way to equally divide these assets. But when it comes to items that have more sentimental value than financial value, how these items are distributed can create distress for the donor and future strife among loved ones.

First, acknowledge that “fair” does not always mean “equal.” In addition, recognize we are dealing with two different time frames. Downsizing occurs during your lifetime, instead of distributing property through a will upon one’s death. A benefit of downsizing is that, in many cases, everyone is living, so crucial conversations can take place with everyone present. This contrasts with the process upon death, when the person making the final call is no longer there. With that in mind, a suggested starting point is to have a plan and to give family members a chance to have these important conversations.

The first strategy is simply to ask. While downsizing, parents can ask their children if they want certain items. This allows for civil resolution regarding how certain items are distributed. Because everyone has an opportunity to speak, the potential for conflict is reduced and the likelihood of mutual agreement is increased.

The second strategy is to create a list of who should get what property, either during one’s life or upon death. I suggest prior to death to avoid any arguments. For many items, this is as much about sentimental value as it is about financial value. This strategy is most effective if you first set expectations among beneficiaries. Photo albums and handwritten notes both may have sentimental value. Take the time to understand who may want one item over another and note that on a list. Lists should be updated if an item was given away or new ones are acquired.

The third method is a family auction. Children get a sum of “estate dollars” that can used to bid for items. This shifts the judgement of value to the children, who can bid more on items they really want and pass on those deemed less valuable. Be sure to provide a way to equalize as needed and to distribute any items not distributed through the auction. Also, it is important to ensure the person running the auction has some understanding of the family. The goal is to make this a fair and conflict-free process.

When deciding how to distribute personal property, it is good practice to ensure each beneficiary gets about the same financial or sentimental value. In some cases, it may be worth considering donating a valuable collection to charity. Think about what strategy will work best for your family. The goal is to ensure that family members will be satisfied—giving the donor as much joy as the beneficiaries. Whatever strategy you decide, or not, downsizing provides an opportunity for people to update their estate plans and decisions on dividing assets.