Determine a process for dividing personal property
In most situations, there will be interest by multiple parties in the same items. There also will be a question of how the items will be valued. This might impact whether a beneficiary is interested in it. For instance, if a diamond pendant is valued at $500, three beneficiaries might want it. If it is worth $1,000, meaning that amount will be taken out of that beneficiary’s share of the estate, the interest in it might be greatly diminished.
There also might be items that have little or no economic value that are cherished by a family member who is a beneficiary, like the cookie cutters they used to bake with their mother when they were a child. There are many valid approaches for working through this complex process, but regardless of the method you choose, your goal is to be as fair as possible with all beneficiaries, and to not give yourself any advantage as executor.
One method of resolving this issue fairly is to conduct a family “auction.” In this scenario, all assets are valued (preferably by a reputable third party), names are pulled out of a hat, and people choose the items they want, based on that order. If you’d like to reverse the order each round (so the person who went last in the first round goes first in the second round), you can do that as well. In this scenario, if the first person to choose wants a sentimental old book, with a $2 value, and the second person wants a $3,000 antique chest, that is fine, as the value of each item goes against the value that beneficiary will receive from his or her portion of the estate.
Third Party Auction (with Family Participation)
Another approach is to simply allow family members to participate in the third party auction of the items to be sold. In this scenario, each member can spend whatever he or she chooses on an item, with proceeds from the sale going to the estate. If you are paying a flat fee to the auctioning company, this approach will not add to the fees that you’ll pay for auctioneer services. If you are paying on a percentage of sales basis, you might want to negotiate a lower rate for items bought by beneficiaries. Regardless of your method, try to make sure that beneficiaries have the opportunity to obtain items of interest from the estate at a fair value.
If you are struggling to maintain positive relationships among beneficiaries or are being accused of acting inappropriately in the executor role, getting an estate attorney involved can be wise. With our Attorney-Assisted Plans, depending on which plan you choose you’ll get up to four consults with an experienced, independent estate attorney in the relevant state. You’ll also get 25% off of future services with that attorney, should you need additional time to settle any issues.