Heckerling 2026 Report 11 - Thursday afternoon
- “Facing the Gaps Together: Strategies for a Fraying Support System,” by Tara Anne Pleat, Kristen Lewis and Bridget O’Brien Swartz
- “May the AI Be with You: Cybersecurity and Ethics for Estate Planners,” by Jeff Chadwick, Tracy Potts, and Lisa Vandesteeg
- “A Recipe Book for Asset Protection,” by Gideon Rothschild, Judge Mindy Mora, and Barry Nelson
Heckerling 2026 Report 12 - Friday morning
- “The Executor and Trustee Guide to Inherited Retirement Accounts: Obligations and Opportunities,” by Natalie Choate
- “Forging Ahead,” by Clary Redd and Meg Lodise
“Facing the Gaps Together” has a very impressive, thoughtful report that is essential reading for caring for providing for special needs beneficiaries. It provides a complete playbook for planning in this area. My commentary: see whether one can minimally fund a special needs trust while the client is living, get it approved as not interfering with benefits more than necessary, then leave a bequest to the approved trust. As the report mentioned, make sure all fiduciaries and those expected to assist the fiduciaries are lined up and approve the plan before the client dies.
Also consider whether a client’s beneficiaries might later become special needs beneficiaries. Authorizing distributions for welfare/best interests can facilitate decanting, which might occur after the client dies and before the beneficiary’s trust is funded. Trust Protector provisions may supplement or replace this mechanism. Maximizing flexibility can attenuate any gift tax issues arising from trust modification, which might be for special needs purposes or simply because circumstances evolve over time.
The report on AI also is an excellent read. Ensuring that confidential information not be transmitted to third parties is, of course, critically important. And we should never trust AI results – always verify. The report gets into much more information on using AI in our practice.
The report on asset protection is also an excellent overview – much more than the typical asset protection lecture. It included the scary topic of lawyer liability for facilitating fraudulent (“voidable” may be a better word) transfers.
The report on Natalie Choate’s session provides great information and tips – definitely worth reading. My additional comments:
- Build in significant post-mortem flexibility. This can provide fixes before the beneficiary finalization date of September 30 of the calendar year following the calendar of death. Also, in the 9th year after death for a trust that must be distributed before the end of the 10th year, one can amend the trust to remove all the nonsense that the rules require without accelerating the payout.
- The election to use 10 years instead of life expectancy is concerning for conduit trusts used for second marriages.
- Be sure to use special language to treat each beneficiary’s interest as a separate account, as the 2024 final regulations provide opportunities not previously available (which opportunities may have resulted from ACTEC comments). This needs to be drafted before the IRA owner dies, although post-mortem fixes are possible.
- For further drafting tips, you might obtain this on-demand webinar, which, unlike my other resources, is not free but is a relatively modest cost: https://leimbergservices.com/webinars/view.cfm?linkid=5112.
The final session was a good summary and included clarification on directed trusts in Alaska and South Dakota.
We will send a final newsletter that has links to all of my Heckerling summaries, so you can have everything in one place.
Steve
