A “Memorandum of Gift” (MOG), sometimes called a “Tangible Personal Property Memorandum” or “Separate Writing”, can be a very powerful and meaningful tool in the estate planning arsenal. Whether you have a will-based plan, or a trust-based plan, you can use an MOG to make your wishes known and leave a legacy.
A Plan for Untitled Property
When most people think about their wealth, they think about large, titled assets such as a home or a retirement account. While it is vitally important to plan for these assets in your will or trust, there may be smaller gifts of untitled property that you would like to be treated with special care.
For example, what if you want to give your granddaughter the locket you got on your 10th birthday? What about the set of tools your son would use and treasure? What if you want your best friend to get a collectable you know she would cherish? You can certainly make specific gifts like these in your will or trust. However, you may find it difficult to make such detailed decisions at the time you are preparing their estate planning documents. And, if you change your mind later, you will have to go back and amend your will or trust, usually requiring the assistance of an attorney to do so.
This is where the MOG comes in. A well-drafted will or trust will include a provision referencing a separate MOG or equivalent document that contains your wishes for specific gifts of untitled property. The MOG accompanies your will or trust, but it is a separate document that you can easily modify without the need to formally amend your will or trust. It therefore offers a flexible way to make small, meaningful gifts of untitled property without having to go back to your attorney every time you want to make a change.
How To Prepare Your Memorandum of Gift
When creating your MOG, you can use a template (get ours for free using the form below) or create your own. The most important part is that each item of untitled property is clearly described, the person you want it to go to is clearly identified, and it is clear that this is your wish. While some clients prefer to make a written list, we have also seen clients create a spreadsheet with images and detailed descriptions, making it even easier to understand their exact wishes. Avoid using general terms like “to my family”; instead, identify recipients by specific names. If at any point you would like to change your MOG, you can! Simply strike line items that you no longer desire, or simply delete or destroy the old MOG and start fresh.
If you are a couple planning jointly, it is a good idea to make three separate MOGs: two that take effect at the death of either of you (i.e. for mom’s ring or dad’s tools), and one that takes affect when you have both died (i.e. for the kitchen table). You should keep all MOGs alongside the originals of your estate planning documents so that they can be easily seen when your plan is being carried out. If the MOG is tucked away somewhere separate from your important documents, it could easily be missed until it is too late. We generally recommend that you maintain only one copy of an MOG at a time, especially if you plan to update your MOG frequently. Having multiple conflicting copies could create confusion that you want to avoid.
An MOG can reduce or even eliminate disagreements between your loved ones if they are done correctly. While estate plans often focus on larger assets, we consistently find that it is the lower-value, sentimental items that can create an opportunity for disagreement among family members if they are not dealt with carefully. You can help prevent that sort of disagreement by clearly making gifts of untitled property in your MOG.
Important Reminders
It is very important to note that MOGs can only accomplish gifts of untitled property (such as clothing, furniture, artwork, or jewelry). An MOG cannot accomplish gifts of titled property (such as bank accounts or real estate), because titled property is controlled by the paperwork associated with it (such as a deed). Similarly, an MOG generally cannot accomplish gifts of cash, because cash is almost always tied up into some kind of titled asset, like a bank account or brokerage account. Whether you have a will or a trust, work closely with your estate planning attorney to make sure that your estate plan distributes such titled assets according to your wishes.
MOGs can complement your estate plan marvelously by preventing conflicts about sentimental items and giving you flexibility to make specific gifts of untitled property to family or friends. As you plan your estate, consider using an MOG or equivalent document as an opportunity to bless those you love and contribute to your legacy.
If you do not have an estate plan, contact our office to get started today.