Heckerling 2026 Report 9 -- Thursday morning, covers:
- “How Will the Trust Survive?” by Phil Hayes
- “Fiduciary Income Taxes: Tips and Traps to Tame a Tedious Topic,” by Melissa Willms
- “Cracks In the Safety Net: Aging, Disability, and the Planning Imperative,” by Tara Anne Pleat
The report on Phil’s session described policy issues regarding trust law. I am concerned that some statutes, such as Delaware’s, allow a trust agreement to provide no liability for a directed trustee and no liability for the person directing the trustee! Having nobody accountable – even minimally – seems to me to be a bad policy. It also invites the 3.8% tax on net investment income, which is imposed on passive income. If no person with fiduciary duties participates on behalf of a nongrantor trust, I believe that all business income will be subject to that tax. In my business structuring materials, see part II.K.2.
The report on Melissa’s session is a excellent broad overview. The 65-day rule of Code § 663(b) has a March 6 deadline for making distributions (March 5 in a leap year). The report did not mention how to get capital gains included on K-1s instead of being taxed to the trust/estate. For free CPE (2 hours per course; first 1,000 registrants are free, and having more than that is not unusual), CPAs can get basics by attending HOW TO SHIFT INCOME TO BENEFICIARIES or an annual update by attending FIDUCIARY INCOME TAX REFRESHER AND UPDATE 2026. I will also offer a free 1.5 hour version of the annual update February 10 from 12-1:30 Central time, with free CLE credit available in CA, IL, MO, NY, and TX. Check Insights under my bio around February 3 to register.
The report on Tara Anne Pleat’s session includes a nice overview of the status of our aging community. Internal family communication – based on correct factual assumptions – is imperative. A very knowledgeable insurance professional also told me not to plan for long-term care at a median price – a good quality facility is usually much more expensive than the median, and most people prefer not to be institutionalized.
Steve
