Jason S. Buckingham

Attorney & Counselor At Law

Painless, affordable, fast estate planning

(707) 745-2200

Here’s a common scenario in making trust distributions:

The trust estate contains cash (most commonly from a home sale), and some items of valuable personal property like a car. We have two or more “residual” beneficiaries who will receive equal shares of the trust estate. One of the beneficiaries wants to keep the car as part of their residual distribution.

For our example, we will use round numbers to make the math easier. We have three beneficiaries — let’s call them Huey, Dewey, and Louie — each of whom will receive an equal one third share of the residual trust estate after administrative costs, debts, and expenses are paid. We will presume that all the costs, debts, and expenses are paid for. The trust estate has $100,000.00 of distributable cash on hand, and the car is worth $5,000.00, for a total residual estate of $105,000.00.

Louie has asked to receive the car as part of his share, and Huey and Dewey have no objection. Here is how calculate the cash and “in kind” distributions to ensure the value of each beneficiary’s share is equal:

Each beneficiary gets a distribution worth $35,000.00 ($105,000.00 / 3 = $35,000.00). As we know, the cash is $100,000.00, and the car is worth $5,000.00.

Huey and Dewey each get $35,000.00 in cash. ($100,000.00 – $35,000.00 = $65,000.00 – $35,000.00 = $30,000.00).

After Huey and Dewey are paid, we have $30,000.00 in cash, and the car.

Louie gets the car valued at $5,000.00, plus the remaining $30,000.00 in cash, for a total value of $35,000.00.

All beneficiary distributions are equal in value.

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