Collecting Assets as a Trustee – Personal Property with No Title | Trust 101 Series | Lawvex
October 12, 2021
The goal of collecting assets is to make sure that they are in the right place. A trustee has a duty to do so, and it’s almost like herding cattle: making each animal go where you want them to be as quickly and efficiently as possible. It’s hard work but crucial for everyone involved because wrongfully taking an asset from someone else could break up their family or even lead people into bankruptcy!
What happens to personal property without a title? Well, let’s look at what that entails.
Let’s assume the person has died, and they have personal property, which are movable items like furniture, clothing, jewelry, vehicles, or trailers. If the personal property is expensive, like expensive art or a vehicle, they’re going to have a pink slip, and that pink slip will show evidence of the title. Most people’s jewelry or smaller items don’t have any title or collections statement. When that happens, the document created for property without a title is called a General Assignment.
In simplest terms, a General Assignment is the trustee’s intention that they’re just kind of putting the world on notice that they’ve created this trust and would like to transfer and assign and set over all the property wherever situated, real or personal, into this trust.
However, there are exceptions.
The first exception is through a personal property memorandum. A person can dedicate small, not expensive items worth less than five thousand dollars to their beneficiary as long as they’ve written it down on an official document known as the Personal Property Memorandum (PPM).
The second exception is if they’ve hard drafted into their will a provision called a specific gift, which functions much like the personal property memorandum but on a larger scale. It doesn’t have an upper limit as there’s no five-thousand-dollar restriction in place.
Since we’re discussing personal property with no title, the first rule of thumb is to check your personal property memorandum. Make sure that the decedent didn’t want some specific item to go to someone else or there is a will involved with the naming of heirs etc., so you should also keep an eye out for who gets what gifts in which format.
The third exception is not obvious, and hopefully, it will never happen to you, but sometimes when people die, they’re involved in a lawsuit, or legal proceedings. For example, maybe the person was pursuing an estate claim or trust case that would lead them into their inheritance. It could also be possible that the person died during divorce litigation before it was finalized. That lawsuit is a form of personal property that can’t be funded to the trust during their lifetime. When this exception occurs, you will have to be appointed as a legal representative for the deceased.
With personal property with or without title, remember, make sure you take possession of the items quickly, make sure it’s insured, get it into a storage unit, take pictures of it, do whatever you can because it tends to walk away. From neighbors to people that feel like they’re entitled to certain items, you have a duty to preserve, protect and maintain the trust property.
This article should have you feeling better about handling personal property without evidence of title. By taking advantage of our Trust 101 Series, you’ll better understand what the expectations are and will be able to handle your responsibilities with ease!
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