Fiduciary Challenges In Providing Trust Accountings: Reporting Trust Activities in Response to Beneficiary Demand

Accountings for Multiple Beneficiaries, Allocating Income and Disbursements Between Corpus and Income, TAI vs. FAI

A live 110-minute CPE webinar with interactive Q&A


Thursday, August 23, 2018

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

Early Registration Discount Deadline, Friday, July 27, 2018

or call 1-800-926-7926

This webinar will guide fiduciary advisers and compliance professionals on providing trust fiduciary accountings to beneficiaries. The panel will detail how to segregate reportable items in multi-beneficiary scenarios, discuss how distributable net income (DNI) figures into a trust accounting, and describe possible risk areas for fiduciaries in providing trust accountings.

Description

Virtually every state imposes a fiduciary duty on trustees of irrevocable trusts to provide a formal trust accounting to all current beneficiaries upon demand, with some states also requiring annual accountings unless explicitly waived by the terms of the trust instrument. In addition to the right of the beneficiaries to demand an accounting, specific events generally mandate a trust accounting. Failure to provide an accurate and complete accounting to beneficiaries can lead to substantial consequences, including a freeze on disbursement of trust assets as well as penalties to the nonconforming trustee.

While individual state rules vary, generally a formal trust accounting includes statements of trust receipts and disbursements of both principal and income, income tax imposed on the trust, a statement of assets and liabilities, and details about compensation paid to the trustee and any agents hired by the trustee on behalf of the trust. Additionally, some states require a statement differentiating between trust accounting income (TAI), DNI and trust taxable income (TTI).

Trustees often face significant challenges in trusts with multiple current beneficiaries. Trustees owe a fiduciary duty to each beneficiary of a trust, and segregating the reporting of distributions can open up a trustee to a challenge based on an alleged breach. Also, a beneficiary may object to an accounting. Trustees and their counsel need to understand how to defend against claims based on a refusal to assent to providing a trust accounting.

Listen as our experienced panel provides a thorough and practical guide to meeting the challenges of fiduciary accountings to beneficiaries.

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Outline

  1. Trustee’s fiduciary duties to provide trust accounting to beneficiaries
    1. Varying state rules
    2. Current vs. contingent beneficiaries rights
    3. Trust provisions to waive annual accounting requirement
    4. Form of beneficiary demands
  2. Most common elements of a trust accounting to beneficiaries
  3. Differentiating TAI vs. DNI concepts in providing a trust accounting
  4. Segregating reportable items in multi-beneficiary scenarios
  5. Defending against beneficiary action related to trust accountings
  6. Risk areas and possible sanctions for failure to provide requested accountings

Benefits

The panel will discuss these and other relevant topics:

  • When a fiduciary must provide a trust accounting
  • How to differentiate between TAI, DNI and taxable income in presenting a trust accounting
  • How to present trust accountings in a multiple beneficiary scenario
  • What must a trust accounting to beneficiaries contain, and what documentation should the trustee retain?
  • What external events commonly mandate a fiduciary to provide a trust accounting?

Faculty

Sanger, Howard
Howard L. Sanger

Atty
Sanger & Manes

Mr. Sanger has over a quarter century of experience in estate planning, trust and estate administration, tax...  |  Read More

Additional faculty
to be announced.

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