A Fresh Look at Distributing Inherited Assets
In theory, parents can get as specific as they want, deciding which children and grandchildren should get the fancy lamp from the living room or the painting of the ship in the dining room. But unless they're items of great intrinsic value, that usually isn't done, and even if an estate is left equally to all the grown children, fights can break out over who gets what. There have even been situations where the first child on the scene cleans out the family house, leading to hard feelings and even lawsuits.
Fortunately, there are some ideas out there that can help maintain harmony among heirs, even when there are no provisions for a specific item.
For example, let's say the sale of a house and other liquid assets leaves $15,000 to each heir. Each heir can then bid in an auction for something he or she wants, e.g., a rocking chair that has minimal intrinsic value but one grown child has fond memories of. He can bid $1,000 for it, and if no one else bids more, it's his — and his inheritance is reduced to $14,000, with the $1,000 divided among the rest of the heirs.
For items that are worth more — like jewelry or antiques — an appraiser can set the value on each, and there will be an agreement that a minimum bid must equal at least three-quarters of the appraised value, for example. Of course, sentimental value may make any item worth much more to one heir than to another.
In a related system, each heir is assigned "points" that don't have any actual value but can be used to "purchase" items from the estate. One heir can use 100 points for a couch, while another uses 50 for a set of dessert dishes. This system helps ensure each item goes to the heir who wants it most, while preventing anyone from getting everything.
Deciding in advance
Of course, one of the easiest ways to do it is to ask everyone ahead of time what they want and write it down — who gets the Wedgewood collection, who gets the antique desk, who gets the piano, etc.
This exercise can be especially helpful, as parents may be surprised at what their grown children really want: No one may care for the fine silverware, but there may be great interest in inexpensive turkey-shaped plates that give everyone fond memories of family Thanksgivings.
In some families, unfortunately, no system will leave everyone happy, as there are long-standing wounds about who was allegedly favored 40 years ago. In cases like this, it's of course best to be as specific as possible in a will. Or a parent can leave instructions for the executor or another mediator — a lawyer or trusted family friend — to settle any disputes over items that aren't specifically covered in the will.
The ultimate goal is to not make the death of a loved one the excuse for family fights that can continue for years.