I have mentioned before that SD and DH are estranged. That sets the stage here. Apologies for a complicated topic.

DH’s sister (SD’s Aunt) put her assets into a trust before she passed. She was not wealthy but wanted to pass along some family assets to DH and another brother, and their adult children. She made SD and and another niece co-Trustees. This was spectacularly stupid as the two girls don’t get along. DH tried to talk her out of it, but Auntie wouldn’t have it.

After Auntie passed, there was lots of drama settling the estate and trust. SD was always involved in whatever hassle there was because she was always right about everything. (She has no legal or financial training.)

Turns out there was provision for that Trust to be divided and continue on after Auntie passed. SD continues to be the sole Trustee for half the trust. The trust earns income and SD splits that between herself, DH, and her brother. DH pays taxes on his trust income.

Last year SD distributed the income in plenty of time for us to include it on our taxes (2024 taxes instead of 2025 when DH received the funds. She insisted that was correct.)

Fine. I included the income for 2024. I’m not a tax expert and assumed (what a mistake) she’d gotten legal or tax advice.

So this year, DH did not receive his distribution. I asked him to ask SD if it was coming. DH wouldn’t as he assumed that she didn’t want him to have the money. Ok, not enough to push it with him.

So I do this year’s  2025 taxes, submit them on April 15. On April 16, the check to DH arrives with a 2025 tax form for reporting this year. The check was dated April 1 but she didn’t mail it until April 13, so there is no way it would arrive for the 2025 return. I have to believe that was purposeful.

Now I question whether this is taxable to us in the year the trust earned the income (2025, in which case I need to do an amended return) or when DH received it (2026, in which case SD’s IRS reporting form is incorrect and she won’t change it). Everything I’m seeing says it’s taxable in the year we receive it, unless the Trust itself has some specific language. I have a copy of Auntie’s original Trust but not the Trust that was created after Auntie’s passing. And SD won’t provide it nor provide DH the name of the attorney who set up the new trust.

So great. I get to potentially spend more money than DH received on a tax attorney to tell me what is correct.

Last edited by Merry (4/17/2026 11:57 am)