Perhaps someone can help me determine what the most equitable distribution of an estate would be. The hypothetical situation is as follows:
a.. $500,000 from proceeds of house sale b.. A vehicle worth $7000 c.. Four heirs One of the four heirs wishes to pay for the vehicle from her share of the estate. How do we do it?
It seems simple but there are several ways of looking at it.
Assuming that those number represent the total value of the estate (surprised!) and assuming that those are after-tax values and assuming that your intention is to divide the estate equally....
The total estate is $507,000, so each heir should receive $126,750. Three of the heirs will receive that amount out of the $500,000. The fourth heir should receive $119,750 out of the $500,000. That is $126,750 less $7000 for the car.
I trust the will simply states equal shares to the 4 beneficiaries? In which case $507K/4 = $126,750 per individual, three getting all cash, one getting $119,750 plus car.
Am I missing something obvious? I can't think of even one alternate method of doing this math.
JOE
First the heirs need to agree on how to evaluate the real value of the vehicle (Kelly Blue Book "good" private sale or whatever). Assume that the vehicle is worth $7000. The estate is now worth $507,000. Divide
507,000 4 ways which comes to $126,750. Three people each get $126,750. the 4th gets the car plus $119,750. Thry to remain friends after the division"Mark Mastrocinque" wrote
Give her the vehicle plus $119.75K, the other three get
126.75K each making a total of $507K.BeachBum (Jim)
She pays each of the other three $1750 and takes the car.
Am I missing something?
Thank you. The problem is I'm not good at math.
The heirs don't need to agree on anything. They get what the will states. Thumper
See response of PeterL
me determine what the most equitable distribution
She gets $119,750 which is $126,750 minus $7000. However, isn't 1/4 of the value of the car hers? Shouldn't she receive 1/4 of the house minus 3/4 the value of the vehicle?
I think you've got it right. She's already entitled to 1/4 of the car's value so 3/4 of the car's value should be subtracted from her share, not the entire value of the vehicle. So, we have two ways of looking at this.
My original answer; In which case $507K/4 = $126,750 per individual, three getting all cash, one getting $119,750 plus car.
You'd prefer, $125,000 - (3*$1750) + Car ($7000), right?
125,000-5250 = $119,750$119,750 + Car is what my first response was. This is not a 'second way', just one that would take two steps. It doesn't need to be complicated, one check per beneficiary, and the one car transfer. JOE
She is entitled to 1/4 of the estate of $507K - that is $126.75K any way you cut it!
I told you...I'm not good at math.
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