Paula Paralegal works for Adam Attorney, who practices estate planning and probate. Adam represents the executor of the estate of Harriet, who was a widow. Harriet and her husband had three children, and under Harriet’s will, each of the three children is to receive an equal portion of the remaining estate, after expenses. The executor proposed and the three children agreed in writing to allow Adam to propose a distribution of the assets that would meet the one-third-each provision of Harriet’s will. Adam has asked Paula to review the assets in Harriet’s estate (see below) and prepare an initial proposed distribution of the estate. From the answer choices listed below, which answer will meet the one-third-each provision?
Asset Value
House $150,000
Investment Portfolio $ 75,000
Savings Account $ 20,000
Checking Account $ 20,000
Vehicle $ 20,000
Explanation
Answer: B - Sell the house and divide the proceeds one-half each to two of the children and distribute the investment portfolio to the remaining child. Then distribute the savings account to one child, the checking account to another child, and the vehicle to the remaining child. Answer B is the best answer because splitting the sale proceeds in half results in two $75,000 halves, which is the same as the value of the investment portfolio. Thus, three $75,000 distributions can be made, and three $20,000 distributions can be made for the savings account, the checking account, and the vehicle. Answer A is not the best choice because the distribution of the investment portfolio to one child would not be equal to the other children. Answer C is not the best choice because the distribution of the house to one child would give that child significantly more than the other children.
