<p>Someone created a living trust.  Originally, the three beneficiaries would receive equal shares of her estate.  Later, she gave (at different times) large unequal gifts to two of the beneficiaries, and nothing to the third beneficiary.  Two years later, she died.</p>
<p>The three people want to form an agreement to equalize the money they get from her, and the law allows this.  What method would you use to calculate how much each beneficiary should inherit, so that the gifts are treated as part of the inheritance and the three persons still end up receiving equal value?</p>
<p>One option is to add the gifts to the estate’s date-of-death value, then divide that sum by 3.  That yields the amount each beneficiary should receive, including any gifts.</p>
<p>If using that option, would it be better to adjust the gifts for inflation in some way?  For example, so that the gifts are expressed in the currency’s value (say, dollars) at the date of death?</p>
<p>I thought of an alternative method:  Determine the estate’s value at the date of the first gift, then somehow calculate the new percentages that each beneficiary should receive.  Then determine the estate’s value at the date of the second gift, and somehow adjust those percentages.</p>
<p>Does that alternative method eliminate the need to worry about inflation?</p>
<p>Are there other methods?</p>

CC BY-SA 4.0
2024-06-13T04:06:50.590Z
How is this related to microeconomics?
Giskard
CC BY-SA 4.0
2024-06-13T04:07:47.197Z
"*would it be better*" Please define "better"
Giskard
CC BY-SA 4.0
2024-06-13T04:09:02.793Z
I hope someone answers with an envy-free mechanism, though according to the text the three beneficiaries only want to inherit money.
Giskard
CC BY-SA 4.0
2024-06-14T20:11:57.667Z
When I said "would it be better", I meant "would it be the best way to equalize the value received by each of the three persons".  It might be worse, in the sense of causing arguments, if the two gift recipients don't understand the financial reasoning of adjusting for inflation.
NotAnAccountant
<microeconomics><inflation>
Methods to equalize gifts+inheritance, considering inflation
NotAnAccountant
# Methods to equalize gifts+inheritance, considering inflation

(Asked by: username_0 on 2024-06-13)

Someone created a living trust. Originally, the three beneficiaries would receive equal shares of her estate. Later, she gave (at different times) large unequal gifts to two of the beneficiaries, and nothing to the third beneficiary. Two years later, she died.

The three people want to form an agreement to equalize the money they get from her, and the law allows this. What method would you use to calculate how much each beneficiary should inherit, so that the gifts are treated as part of the inheritance and the three persons still end up receiving equal value?

One option is to add the gifts to the estate’s date-of-death value, then divide that sum by 3. That yields the amount each beneficiary should receive, including any gifts.

If using that option, would it be better to adjust the gifts for inflation in some way? For example, so that the gifts are expressed in the currency’s value (say, dollars) at the date of death?

I thought of an alternative method: Determine the estate’s value at the date of the first gift, then somehow calculate the new percentages that each beneficiary should receive. Then determine the estate’s value at the date of the second gift, and somehow adjust those percentages.

Does that alternative method eliminate the need to worry about inflation?

Are there other methods?

**Tags:** microeconomics, inflation

> **Comments:**
> **username_1**: How is this related to microeconomics?  
> **username_1**: "*would it be better*" Please define "better"  
> **username_1**: I hope someone answers with an envy-free mechanism, though according to the text the three beneficiaries only want to inherit money.  
> **username_0**: When I said "would it be better", I meant "would it be the best way to equalize the value received by each of the three persons".  It might be worse, in the sense of causing arguments, if the two gift recipients don't understand the financial reasoning of adjusting for inflation.  

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## 0 answers

