How to Settle an Estate

H. Martin Weingartner and Bezalel Gavish
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H. Martin Weingartner: Owen Graduate School of Management, Vanderbilt University, Nashville, Tennessee 37235
Bezalel Gavish: Owen Graduate School of Management, Vanderbilt University, Nashville, Tennessee 37235

Management Science, 1993, vol. 39, issue 5, 588-601

Abstract: This paper considers the equitable division of a set of assets, all or some of which are indivisible, among two beneficiaries, simultaneously using several methods of valuing the assets. The problem arises when a fiduciary is required to distribute the assets---of a trust or estate, or to divide the property in a divorce or in dissolution of a partnership---in which the assets have separate market values and tax bases. In other variations of this problem, the beneficiaries are presumed also to possess an infinitely divisible asset, such as cash, or some of the assets may be liquidated. Models for combining consideration of subjective values for the assets in addition to the objective market values are considered. Computational methods for these problems are discussed and illustrated.

Keywords: estates and trusts; asset division; negotiation; multicriteria decision making; multiconstraint knapsack problem (search for similar items in EconPapers)
Date: 1993
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