A decedent will likely pass on both tangible and intangible property through their last will and testament. Questions often arise regarding the difference between tangible and intangible assets and how something that lacks a physical existence is classified for distribution.
Tangible or intangible property?
Tangible property includes jewelry, family heirlooms, personal property, and other physical items. Intangible property includes monetary assets in the bank, investment accounts, digital assets, and other items that do not have a physical form.
A misconception is that money because it has a physical form, is a tangible asset. Courts have decided that most monetary assets are intangible. A few exceptions exist for coin or currency collections, but in general, monetary assets are intangible items.
Stock certificates from a closely held company were also considered intangible assets in a recent appellate case. The plaintiff in the case tried to establish that the stock certificates were tangible personal property, but ultimately the court decided the stock was intangible and did not fall within the decedent’s personal possession clause. Even though the stock certificates are physical items, the documents served as a representation of the actual interest.
Help is available
When creating a last will and testament, it is best to consult with an estate planning attorney who will know how to classify tangible and intangible items to avoid mistakes. To speak with an attorney, call 586-726-1000 or visit our website.
