• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Fair Division

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

johnnyfever

Junior Member
I'm taking a discrete math course and the subject of fair division was presented by the teacher as a mechanism to resolve estate disputes. The method makes no sense to me; I believe in a sealed-bid auction format for resolving estate disputes. A format where the highest bidder essentially buys the item and that dollar amount is both taken out of his share and helps to build the total estate value. But I can't find anything in writing/official to support that concept.
 


FlyingRon

Senior Member
Neither one of those is used in practice. A partition suit is usually brought and in the odd case where the property is dividable, then something like fair division might be used, but this only works when you've got a large amount of undeveloped land typically. With a developed property, you can't saw the improvements in half to make the division, you can't usually divide off a larger portion of the unbuilt land to counter the value of the improvement, etc... and zoning laws usually preclude subdividing smaller tracts.

But your method (regardless of what you BELIEVE IN ) isn't used either. The property is marketed normally....an appraised value is set and the property is marketed publicly. Offers come in and are accepted, or rejected (or perhaps countered), just as if a single person was selling the land, but with whatever court-ordered procedures the judge chooses.
 

TrustUser

Senior Member
to the op - if the goal is to do a fair distribution, then what ron describes is also the fair way, since this method brings about an actual number that other people will pay for it.

your method would be based on what a person thinks the asset is worth, and also how much the person wants the asset.

the mathematical fair division fails for the same reason that your method fails. what a person values something at is not the same as what said something is worth, from a financial standpoint.

the theory itself admits it is mainly for items that can be divided into portions easily, without losing value.
 

anteater

Senior Member
I think that the OP is probably referring to personal property.

As far as I know, no state mandates any particular method. It is pretty much up to the estate administrator and beneficiaries to find a fair process.
 

TrustUser

Senior Member
i see. well, as long as everyone agrees, that would seem to be the main focus.

it is highly unlikely that personal property would be divisible.

you can take the right sleeve and i will take the left sleeve - LOL. both of us would end up with nothing.
 

johnnyfever

Junior Member
Let Me Rephrase

Assume the items are the family quilt, the dog, photographs and cash?

There must be a common accepted methodology by which these things could be split. Keep in mind that these things have little to no value to a third party so a market value appraisal is impossible.

My discrete math course suggests a practice called "fair division". Without describing exactly the math behind fair division, I have serious doubts about its appropriateness. I'm looking for a methodology that lawyers would use.
 

curb1

Senior Member
You are talking about the reason there is an executor, a trustee or personal representative. There are no formulas that can dictate a qualitative decision. You are talking art, not science.
 

johnnyfever

Junior Member
Curb1:

I have a math textbook that describes a scientific/math way to divide things amongst people and its titled "fair division". But forget the textbook, common sense suggests that no executer could value the family quilt. Let me suggest a simple methodology for assets to be divided perhaps someone has an official (as in I can reference on some website) name for it, anyone?

Grandpa dies leaving the family quilt and $1,000,000 in his estate. In a sealed bid format son #1 bids $200,00 for the quilt and son#2 bids $100,000.

Value of Estate $1,200,000

Son #1 gets the quilt and $400,000
Son #2 gets $600,000

How can it get an fairer than that?
 

anteater

Senior Member
That'll do. At least for wills that say only that everything gets divided equally among N beneficiaries.

I'm still uncertain what you want. An endorsement that this is the way it should be done?

What's fair is whatever makes everybody content enough that they aren't going to bother the court with a bunch of squabbling.
 

johnnyfever

Junior Member
I’m simply a student that made an argument in discrete math class that “fair division” doesn’t make any sense. The teacher challenged me to identify a methodology that works better. I’ve scoured the internet to no avail. Because lawyers probably deal with this type of issue every day; I figured someone would have named it.

For whatever its worth, the methodology I described would also work for assets that could be valued. Afterall, if an appraiser says something is worth $500,000 and both of us want it for that price, how does the appraisal resolve anything?
 

TrustUser

Senior Member
as anteater said, if both parties are agreeable.

however, what you are trying to determine is "it really fair ?"

the fact that 2 parties think it is fair, is not the same thing as it being fair.

what i dont like about your method is you are combining assets with a financial value and assets with an emotional value.

you are requiring people to place a dollar value on their emotions. some people are much more sentimental, and will place a higher dollar amount on an item, because of it.

in your scenario, the more emotional person will come out the loser.

in your example, there is only one personal item. but in real life, you are apt to have many items.

i would be more apt to split the appraised items in half.

and then do some other bartering system for the personal items. if i can have dad's favorite couch, you can have his chair and watch - that sort of thing.
 

curb1

Senior Member
johnnyfever,

Your example breaks down quickly when the assets become more complex (a mixture of assets that have an appraisable value with those that have sentimental value). It becomes more complicated when there are 5 to 20 beneficiaries.
 

johnnyfever

Junior Member
Trustuser:

“what i dont like about your method is you are combining assets with a financial value and assets with an emotional value. you are requiring people to place a dollar value on their emotions. some people are much more sentimental, and will place a higher dollar amount on an item, because of it. in your scenario, the more emotional person will come out the loser.”
I couldn’t disagree anymore with what you said. In my example the person that placed the most sentimental value on the object became the owner of that object. The other person was compensated, however that does not mean the other person didn’t want the object. What’s the alternative? The person that sends the executer of the estate more candy at Christmas gets the object? Or they plead their case to a judge, thereby granting the object to the person that speaks the best or has the best lawyer?

“in your example, there is only one personal item. but in real life, you are apt to have many items”
My example can work for X amount of objects. Think of the items in a house. You could divide all the items using this methodology. At the end of the bidding, cash would make both parties even.

“i would be more apt to split the appraised items in half.”
If both people want the item at the appraised value then would have them sell it for less than they think it’s worth? Furthermore, appraising and selling items can be expensive, take time and are never 100% accurate.

“and then do some other bartering system for the personal items. if i can have dad's favorite couch, you can have his chair and watch - that sort of thing.”
I can see it now, son #1 says to son #2 “Dad’s couch is worth big money, tell yah what I’ll take the Mercedes you can have the couch.”

Curb1:

Sure it becomes more complicated as you add more types items and beneficiaries. But any alternative requires a third party that the beneficiaries trust equally. Practically speaking, that is impossible, this system takes all the subjectivity out of the equation.
 

TrustUser

Senior Member
the alternative is what i suggested, and what is most commonly done. items with financial value are given to the beneficiaries, as a group.

personal items are distributed in a way that the beneficiaries agree to. most personal items do not have large cash value, such that beneficiaries are not squabbling over them.

again, your plan involves placing financial items with sentimental items - not a good way at all. and yes, the sentimental person comes out way far behind.

an automobile is not a good example of personal property.

the way i did my trust is to keep my titled assets in trust, with benefits shared by the beneficiaries, as a group.

my non-titled assets are then distributed based upon an agreement amongst the beneficiaries. for those items that can not be agreed upon, they are sold and the proceeds split. so there will be no arguing over my estate since i have placed an exact way to deal with it.

this is part of a good trust. it should have a way of settling differences.
 

johnnyfever

Junior Member
I recognize that all good estate plans have a trust that clearly spells out who gets what. My question is and continues to be, how would you split an estate if a trust was not prepared and there are both sentimental and non-sentimental items in the estate? Or imagine a partnership that wants to disband, how do the partners resolve who gets what?

I think I know what’s going on, to the extent there is a mathematically/scientifically fair way to structure a split there wouldn’t need to be as many lawyers and this forum is basically full of lawyers. I’ll let you know how the math world responds to my question.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top