How are assets valued for a fair distribution to the heirs?

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How are assets valued for a fair distribution to the heirs?

Father recently passed away and had no will. However, my Brother and I were told by him before he passed to split everything equally. One of the things that my father left behind, and easily his largest asset, was a Cobra Kit Car, appraised at $35,000. My brother wants this car (I don’t contest). The problem is that my brother spent some of his own labor and some money building this car therefore, as far as splitting assets is concerned, should this be taken into consideration when splitting 50/50? What is legally correct here?

Asked on November 19, 2010 under Estate Planning, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Legally, the value of the asset is its current fair market value, unless there was some agreement or understanding that by putting his time and money into the car, your brother would have some interest in it or be repaid in some fashion. If there was, he is entitled to either repayment or a larger share of the car commensurate with the agreement. However, to avoid a possible fight with a family member, especially if your brother does believe and would try to prove that is the understanding, a good idea might be to agree to compensate him for the extra money he put in--the parts, etc.--but not for the sweat equity or  time, since that is also almost impossible to value or prove. That way, he gets a larger share of the proceeds, but is not paid for doing something he may have done for fun or as a hobby.


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