my wife's family handled this in a way that worked well. ...
5 - I want this very badly
4 - I'd really like to have this, but not as much as a 5 rating.
3 - I could make good use of this
2 - I might be able to use it
1 - I don't really need it, but if nobody else wants it, I'll take it before it goes to a garage sale.
Interesting method, Bob_Smith.
After reading an article in Scientific American in 1995 on a discovery on 'envy-free distribution', I came up with my own method on how to divide up an immediate family member's estate when they pass on in the near future:
1. Obtain valuations on all 'significant' (over $1,000) items, with ballpark approximations on remaining knick-nacks.
2. As she has a trust, distribute info to each heir on what their share of the estate is approximately valued at, and a listing of all assets that the estate has.
3. Hold an 'auction', whereby each heir can determine themsevles what they want to 'bid' on. That way, if two people really want that 100 year old family heirloom solid iron meat pounder and cutitng board, they can determine amongst themselves how badly they want it by bidding for it. If each person's share is $10,000 of the estate, and the winning bid ends up bidding $10,000 for the meat pounder and cutting board, then they get exactly what they wanted to for the value that they placed on it.
There are two catches to this procedure:
a) Emotions might run high for some items, and people might end up bidding over and above what would be a sensible value for an item due to senitmental value (and later regret that they bid so much for it). This is the purpose of putting a ballpark value on each item so people can see what they are overbidding on. Also, even though everyone would know that they are choosing the value of the estate, someone who bids their entire share of the inheiritance for a meat pounder and cutting board might claim ignorance and say that they were cheated (even though they knew the rules beforehand).
b) In the event that one (or more) people successfully bid on items that total more than their share then they would have to pony up the cash to the remaining heirs based on the amount of their winning bids.
The above would work well if the estate had a decent percentage of cash, so that way each person would likely be left with some money to pay out any overbids with. It would also work well if there were one or two large items (like real estate) which more than one heir wanted.
With items like jewelry, a jeweler will always appraise things for more than the retail price would be - so you might want to have the jeweler give you two prices: the price they would pay you to buy the jewelery off of you, and the price that you would pay in a retail jewelery store. You would then list both prices in your summary sheet for the heirs to see, and let people draw their own conclusions on what the piece is worth to them.
