How do you divide estate property equally between siblings?
I thought I saw an article on equal disbursement with a chart showing how to do it, but can't find it now. My siblings are upset with me because I said it made sense in the bookkeeping world to have everyone buy their take of personal property (including sentimental items). That way, our sister, the administrator, only has to write checks with the same amount to everyone on settlement day. So, they went ahead with that idea. We had our own mini auction and agreed on prices. Does that also apply to the real estate? Is there a pro or con for equal disbursement? I feel it is more fair to the ones who are buying only sentimental items. Am I correct in this thinking?
Whatever you and your siblings decide to do, you must all be guided first and foremost by what the will stated -- or if there was no will, by the controlling state law, called the law of intestate succession. If the will or the law requires that the estate is to be divided equally, you must do that.
The value of the estate is what must be divided, but there are different ways each asset can be distributed. Clearly, the “value” of a sentimental object is determined subjectively -- not by an appraiser, but by the beneficiary who wants to receive it. An auction for personal property is often a great solution, especially if you and your siblings can't readily agree upon value or upon who will receive a particular item.
Real estate is different. It is easier to determine the objective value of real property, usually by hiring a real estate appraiser or agent. What can be more difficult is figuring out how to divide real estate equally if that is necessary.
Sometimes, siblings agree to sell the property and divide the proceeds, or to keep the property and share its use. In other families, one sibling might want to keep the home, while the others have no interest in it. If there are sufficient other assets in the estate, there can then be a “non pro-rata distribution” -- an equal division of value. In such an arrangement, the sibling who wants the house gets it, and the others get cash or other assets, but everyone walks away with assets of the same value. Another option might be for the sibling who wants the house to simply buy out the other siblings' interests in it.
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