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Home » CalCPA Discussion Forum » Estate Planning » CRUT payout, no income and illiquid assets

CRUT payout, no income and illiquid assets Expand / Collapse
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Posted 12/1/2009 10:55:56 AM
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Client has set up a CRUT that requires an annual payout of 7%. The document says that the payout should first come from income and then principal. The initial cash from sale of property was invested in construction loans, no payments are being made on the loans, and the majority may become worthless. What do I tell the client when he wants to know if he needs to may the annual payout?
Post #856
Posted 12/1/2009 5:22:43 PM
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That's an interesting question. 7% of zero is zero, so if the assets are totally worthless, no distribution is required. However, you need to make some attemept at valuation - in my opinion.

If there is some value, an undivided interest in one of the assets may be the only thing available for a distribution.

Good luck.

Mary Kay Foss

Post #861
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