Mastering Fiduciary Accounting Income for Estate Planners and Administrators

Interpreting Operating Documents, Applying UPIA and State Law, Designing Distribution Strategies, Avoiding Beneficiary Challenges

Recording of a 90-minute CLE webinar with Q&A

Conducted on Thursday, July 23, 2020

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will provide estate planners with a comprehensive and practical guide to navigating the complexities of fiduciary accounting income (FAI) for trusts and estates. The panel will focus on the impact of FAI on planners and estate administrators and will detail how to interpret essential trust and estate provisions to apply to FAI calculations. The program will focus on planning implications of FAI considerations, including distribution strategies and specific allocation challenges under trust accounting principles.

Description

A critical and often overlooked task for estate planners, administrators, and trustees is navigating the rules governing FAI. FAI is the amount generally available to distribute to income beneficiaries of a trust or estate. It is different from both taxable income and distributable net income, both of which are tax-related concepts. Estate planners and administrators must have a thorough understanding of FAI principles to allocate income and expenses accurately and distribute assets equitably.

The starting point for determining FAI is the operating instrument, such as a will or trust agreement. Where the operating document is unclear as to an income receipt, an expense item, or a distribution item, the FAI determination defaults to the state law of the trust situs. Most states have incorporated the UPIA, with some local differences. However, fiduciary accounting principles determine the timing and amount of distributions to beneficiaries.

Another critical skill is reconciling FAI to both distributable net income and trust taxable income. Accountants and lawyers representing fiduciaries must grasp the critical differences between fiduciary accounting and tax accounting to avoid both tax consequences and beneficiary challenges.

Listen as our experienced panel provides a deep and practical guide to what estate planners must know to master FAI beyond the basics.

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Outline

  1. Specific challenges in allocating income and expenses to FAI
  2. UPIA factors in calculating FAI
  3. Impact of FAI on trust distributions
  4. Tax considerations such as distributable net income inclusion on distribution strategies
  5. Planning considerations and traps to avoid

Benefits

The panel will review these and other key issues:

  • How operating documents impact FAI calculations
  • Interpreting state laws and UPIA provisions in circumstances where operating documents are silent or inconclusive
  • Reconciling FAI to distributable net income and trust taxable income
  • How FAI determines distribution amounts and timing

Faculty

Keam, Natalie
Natalie Keam, CPA, CFE
Manager
Onisko & Scholz

Ms. Keam has over eight years of experience in accounting and auditing, in a range of industries including, non-profit,...  |  Read More

Lee, Francine
Francine Lee
Senior Manager
Ernst & Young

Ms. Lee brings over 25 years of experience creating income tax and estate planning solutions for high net worth clients...  |  Read More

Sandler, Evan
Evan Sandler, CPA, MST
Tax Manager
Onisko & Scholz

Mr. Sandler is a Tax Manager at Onisko & Scholz with a specialty in estate and trust tax.

 |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts.

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