Under a Last Will and Testament, a decedent disposes of both their tangible personal property as well as their intangible personal property. Questions might arise in the context of administering an Estate, however, as to whether an item is classified as tangible personal property or intangible personal property of a decedent. This distinction is often important, as the distribution of an item of significant value can be directly affected by this determination.
In general, tangible personal property consists of items such as jewelry, personal property, personal effects, family heirlooms, and other physical items. Intangible property generally includes assets located in an account, monies, and items which are not physical. It is a common misconception that since money is physical, it is a tangible asset. Instead, the courts have decided that money is an intangible asset. On the other hand, if a decedent had a personal coin collection or personal collection of unusual currency that the decedent identified, such items could be considered tangible personal property. In general, however, monetary assets, irrespective of their nature, are considered intangible items.
A recent appellate division case discussed whether stock certificates in a closely held corporation could be considered tangible assets. Despite the plaintiff’s attempt to classify the stock certificates as tangible personal property, the court ultimately found that the items were intangible and, therefore, did not fall within the personal possession clause of the decedent’s Last Will and Testament. This decision was in accordance with well-established law. Even though the stock certificates themselves were physical, the document only represented what the actual interest was in the corporation and was not a manifestation of the same.
As such, when an estate is being distributed, it is always important to pay close attention to how an executor is classifying items for distribution. The classification of items as either tangible or intangible assets can result in drastically different distributions. Therefore, if any questions arise, it is suggested that a party consult with an attorney concerning any such interpretation as soon as possible in order to prevent an inequitable result.
