How to divide the Estate Fairly and Happily

Shown here is a way to allocate items in an estate so everyone is happy. Even the deceased.

Normal situation
All too often the division or allocation of specific items from an estate is a source of division or stress among the heirs. We've all heard horrible stories about an heir absconding with the bulk of the "treasure", or about two heirs wanting the same object or about games the elderly play when they tour each heir separately through the treasure room asking "What would you like after I'm gone?" and then separately committing the same item to different heirs. We've all heard stories of siblings breaking off communication over disagreements and misunderstandings related to dividing an estate.

Fair Situation
The division can be easily achieved with each item going fairly to the heir that most values it. The other heirs can be cheerful to see each item go to its most desiring new owner.

Step 1: The defective normal method of allocating items

Problem 1) Even though Betty and Wilma are equal share heirs, there are problems.
Their recently deceased father had "accidentally" promised the gold tea pot to both daughters.

Problem 2) He did not promise the Picasso to either and it got ripped in the struggle.

Problem 3) He may have accidentally promised more items to one daughter even though the will says they each get 50% of the residual estate.

Problem 4) One daughter expressed interest in an item and it was promised to her, The other daughter was even more attracted to it but was too polite to mention it.

Problem 5) two heirs want the same sentimental item but can't figure out which of them wants it more. (one says: "I really, really want it." the other says: "No, I really, really, really want it.")

Comments

[jfeniak]

Hi,
I read your posting on dividing the possessions of a loved one and I wanted to let you know about something that can make the dividing process easier. After a long battle with cancer, my mother in law passed away in February of last year.

I was made the executor of her estate. The process of dividing up her belongings between her daughters was very difficult because of the sheer number of items to inventory and divide evenly, and fairly. I created an iPhone App to help with the process of dividing the possessions.

HeirSplit is an iPhone app that allows you to easily inventory and then split up the belongings of the deceased or it can be used to help aging parents decide "who should get what" to avoid family arguments after they are gone.

I hope this app can help someone avoid the difficulty that I went through.

[mdollar]

Real nice article. Thanks!
It appears that "estate bucks" are based upon the amount of total known CASH assets only, since the value of the entire estate has yet to be determined when this takes place. Knowing the amount of "estate bucks" available prevents over-extending beyond what the estate is worth during this process. Heirs could supplement with their own cash when "estate bucks" run out I suppose.
IF only "estate bucks" are allowed to be used in the bidding (and non-heir bidding with cash is restricted, for instance to items not bid upon by heirs), then a wealthy heir would have the same purchasing power as all the other heirs (at least until the "estate bucks" ran out).
I've sent this article to my sister for her comments, thinking (as future executor of our father's estate) it is not too early to begin gaining consensus before the need arises.
Thanks again for the thoughtful piece.

[Woodenbikes]

I'm glad you are seeing the merits. I think the useful consensus is from the estate trustee (e.g. Your father if it is his estate). His consensus helps minimize the volume of sub optimally distributed items made as one-off promises or misunderstandings between dad and individual heirs meeting with him one by one. The estate buck bidding technique only optimizes the distribution of the assets not assigned through other techniques. I personally believe it makes sense to maximize the volume of the estate distributed optimally and to minimize the one-off assignments of items to individuals.
The volume of estate bucks could be estimated as the market value of the amount of the entire estate.

[Tim Temple]

In my case, my parents died with no valid will, so I was asked to divvie it up. My sister, niece and nephew wanted percentages that would have left me with 0% even though I could have taken 100%. After much thought & prayer, I took 50%, abandoned 50% for my sister on the proviso she abandon 25% of what she got to each of her kids. My sister procrastinated down to the wire.

As for the belongings, I handed out colored dots -- one color for each of us. Put your sticker on what you were interested in and then later we would negotiate if something had more than one sticker on it. My sister cut the stickers into quarters and pasted them all over the place. But then she didn't have room for 1/3 of what she stuck. I should have told her to only stick what she had room for.

The remaining contents were sold to a jobber. Later, I ran across my old abacus in an "antiques" store in town.

[Woodenbikes]

Your story about the classic "dots method" (or request method) shows that the method's shortcoming is that it is only one-dimensional. It only shows WHO wants and item. It fails to show how important getting the item is to the person. In that method some people over-request and then dump stuff. The problem is they deprived other heirs who may have wanted the items and deprived themselves of extra money they may have enjoyed more than the item. So in the dots method there is either one winner or no winners as opposed to everybody getting the best mix of what they want.

[akarppinen]

If problems go on and on, one option is to turn everything into money. Very easy to divide equally.

[annie]

As the "default" executer of my fathers estate with, 6 other siblings (2 of which are disinherited)  I found your Instructable very practical and fair!  Thanks for the post ;)

[chickenlover]

Aside from the problem when the family is already dysfunctional and do not play well with others, this might not work well when there is great economic disparity between the heirs.  Ultimately, you are buying each others' shares from each other.  The heir who really needs money more than anything will not want to sacrifice their share of the money left at the end to buy the items from the other heirs.  Whereas mom might have wanted all of the heirs to get some of the sentimental items, regardless of their economic circumstances.  So consider this when adopting this method.  Some estates just let heirs each select an item in turns until everything everyone wants is taken, without assessing the value against each heir.  The method in this DIY is fine only if money is equal in value to each of the heirs.

[Woodenbikes]

You bring up two problems:
A) Dysfunctional family members and B) Wealth disparity

A) The proposed system is meant to maximize the individual and total satisfaction/happiness of all of the heirs with the distribution of the items.  (assuming they concede to the decedant's wish that the heairs each get a specific percentage allocation of the estate value.)  If they dissagree with the will on the percentage, they need to go to court no matter what system you use.  If they have trouble allowing the process to occur without an authority figure present, one could be brought in,  If they have trouble allowing the process to occur with an authority figure present, I wonder what system would elicit their cooperation.  (i.e. it;s not a problem of the auction system.)

B) The system is intended to allow each and every heir to maximize their personal happiness and satisfaction with the distribution of items and money.  In the example you raise, a money-needing heir may maximize everyone's happiness by accepting the money paid by item-loving heirs.  Maybe the Decedent should stipulate this distribution method in the will to indicate they are comfortable with their heirs maximizing heir happiness.  As a future decedent, I hope to allow my heirs to maximize their happiness with the distribution of items and money.  Any specific bequests I make are potentially sub-optimal for the interests and circumstances of the item and the individual in the distant event of my passing.

[chickenlover]

I understand your point; I would only say that the one flaw I see is the underlying assumption in this system that money is the appropriate measure of happiness for the heirs.  When there is wealth disparity among the heirs, one very wealthy heir may  dominate every auction because money to that heir is not necessary to achieve happiness.  Such a wealthy heir could buy all the personalty at auction at no real "happiness cost" because money is not scarce for that heir; whereas other heirs may be significantly less happy having no items of sentimental value.

No system is perfect.  Your method has many good features.  I am just saying that when a decedent has heirs with wide disparities in wealth, using relative monetary value as the equalizer might not fairly equalize happiness.  In such a case, the decedent may want to allow the heirs to choose items in turn after drawing lots without regard to value - or at least allow each to select a few items - maybe even limit this class of goods to those having little monetary value but potentially high sentimental value.

[suedalsing]

Yeah that's all great, you can leave all the instructions you want, but when your fellow heirs and non heirs are creeps, it never turns out.

[adamvan2000]

I like it. It's fair, even, and adds some life to a very sombre time. Kudos on coming up with such a unique way of addressing a problem most of us will have to deal with at some point in our lives, even if it's for our own estates. ~adamvan2000

[teamcoltra]

Mmmm the gran torinio. ;) I think this is an awesome idea... I still have another 70 - 80 years to think about what I want to do.... but still :)

[Argool]

pretty good!

[skunkbait]

Good Idea! That would be perfect for the division of items of monetary value. The insanity that sets in though, in regard to the sentimental stuff might just overwhelm the system.

[Woodenbikes]

It works for items with more sentimental value also. The person with the strongest sentimental value for the item typically out-bids the others who are happy enough to get the resulting money. In my family the bidding went way above garage sale value on the book my parents used to read to us. ("If I ran the Zoo...")

[Lithium Rain]

The one problem with this method is that it only works if you're dealing with sane, rational, honest people. Which doesn't always very accurately describe grieving persons. :-\ Nice idea though! I'm sure it'd work in many cases. 5/5 *s.