Reed: What is personal property?

Sandra W. Reed
Special to the Reporter

Hector’s last will and testament included a provision gifting all of his “remaining household and personal property” to his daughter, Alice. The will further stated that he was leaving the rest of his estate in equal shares to Alice, her sister, June and her brother, Otis.

Alice’s brother and sister claim that their father intended for Alice to get Hector’s personal effects, but the three of them split the personal property contained in assets like bank accounts, stocks and bonds. Who is right?

Sandra Reed

What is the legal meaning of “personal property?”

Last year an appeals court in Houston, in a case styled In re Estate of Hunt, answered this question by stating that the term “personal property” isn’t ambiguous, so that the court, in interpreting Hector’s will, could not give it any other meaning than that which the law prescribes. Personal property is a “term of art” having a special legal definition. Personal property refers to all property other than real property.

The term “personal property” includes tangible and intangible property. Tangible personal property has physical substance. Examples are furniture, vehicles, jewelry and art. Intangible property includes things like bank accounts, stocks, bonds, insurance policies and retirement benefit accounts, intellectual property and goodwill.

Who gets the bank accounts, stocks and bonds?  

Based on this court’s decision, Alice gets to keep, not only her father’s tangible personal property, such as household furniture, art objects, clothing and other personal items, but also all the intangible property, that is, his bank accounts, stocks and bonds.

Moral of the story

If Hector intended to his daughter to inherit his “personal effects” and his three children to split the bank accounts, stocks and bonds, based on In re Estate of Hunt, he (and anyone else making a will) should have avoided using the term “personal property” in his gift. Instead, his will should have used language like this: “I give my personal effects such as jewelry, clothing, books, china, crystal, silverware, furniture, household furnishings and personal property of a similar nature to Alice.”

The will should have also included a provision stating that all his bank accounts, stocks and bonds were to be equally divided among the siblings.  

Sandra W. Reed practices, Elder Law in Somervell County, which includes handling probating of estates, drafting of wills, trusts, powers of attorney and deeds as well as estate and Medicaid planning.  She lives on beautiful Chalk Mountain and can be reached at 254.797.0211; 817.946.2809 or at sreed@kbzlaw.com.