Wispact Newsletter Winter 2024

Overview of 2023: Tax Information – Mailed on or before March 15, 2024

Tax season is approaching and we want to make sure all beneficiaries are prepared to file their taxes. It is anticipated that the tax information will be placed in the mail to beneficiaries on or before March 15, 2024 though the actual delivery date will depend on the U.S. Postal Service.

If you have a savings, checking account, or certificate of deposit, you are probably used to receiving a Form 1099 by 2/1 of each year noting the interest that has been reported to the IRS. Therefore, you may wonder why you don’t receive tax information from your Wispact Trust until mid to late March of each year.

The short answer is that Wispact must first receive data regarding the securities that the Trust is invested in before our Beneficiary’s tax letters can be finalized. Since those third parties have until April 15th to file their data that we rely on for tax reporting, Wispact and our Trustee, Capital First, must wait to receive that information before preparing the Trust’s and beneficiary’s tax information.

We are also providing you the “long answer” so that you have some additional context as to what happens behind the scenes regarding tax preparation. Your Wispact Trust is invested in Exchange Traded Funds (ETFs) which must report dividends, interest and capital gains/loss information annually to the Wispact Trust. These funds have until April 15th to report their tax information, including any reporting regarding reclassification of dividends. That means Wispact must wait until we get all of this information from these third parties prior to finalizing the tax letters we provide to you. And, unfortunately, ETF companies may (and routinely do) reclassify dividend information right up until April 15th. If Trust tax information is submitted to Beneficiaries before we get all of this information, and an ETF company subsequently reclassifies dividend information, then amended tax information would have to be issued to Beneficiaries who may then have to amend their own personal 1040 tax returns. Our goal is to work towards avoiding having to issue amended tax information. Accordingly, ETF historical information is reviewed during the first 30 – 60 days of each new year, to determine if it is likely that the ETF company will re-classify dividend information, and to determine a date when the tax preparation can begin.

Once we have made a reasonable determination that there is not likely to be any additional reclassifications and/or we receive this finalized ETF tax information, the information will be allocated/unitized among all Wispact Trust sub-accounts. After this unitization, the WisPACT Trust tax preparation can begin. And, once completed by our tax provider, we send the tax information to you so that you can file your taxes.

What tax information is sent to beneficiaries?

Grantor Tax Letters are issued to beneficiaries of self-funded accounts to incorporate the trust sub-account tax transactions on their personal Form 1040 income tax returns.
A  Form 1041 Fiduciary Income Tax return is prepared for 3rd party funded trust accounts and a Form K-1 tax document may be issued from this tax return to a beneficiary. The beneficiary then reports the K-1 tax information on the beneficiary’s personal 1040 income tax return. The IRS website publishes K-1 instructions for a beneficiary filing a 1040 income tax return. A beneficiary should wait to receive the K-1 tax form before filing their personal 1040 income tax return. If a beneficiary doesn’t wait for the K-1, there is the possibility that their 1040 income tax returns may need to be amended.

When will tax information be sent to beneficiaries?

It is anticipated that the tax information will be placed in the mail to beneficiaries on or before March 15, 2023 though the actual delivery date will depend on the U.S. Postal Service. However, there may be circumstances unique to a particular trust file(s) or data that may not be available in time that may cause the mailing of the tax information to beneficiaries to be delayed.

Could amended Wispact Trust tax information be mailed to beneficiaries after March 15, 2023?

Yes, if additional 1099’s are received, an estate issues a K-1 to a Wispact Trust whose tax preparation has already been completed, or amended tax information is received from ETF companies the Wispact Trusts are invested in, amended Wispact Trust tax information may need to be prepared.
The Wispact tax information is furnished by an accountant. Neither Wispact nor the Trustee, Capital First, or True Link Financial Advisors, LLC are tax professionals and are not able to interpret the tax information or to advise a beneficiary as to whether the beneficiary meets the requirements to file a 1040 tax return. All beneficiary tax questions, and tax information received by a beneficiary, should be directed to the beneficiary’s tax professional to determine what information may need to be included on a beneficiary’s personal 1040 income tax return.

Wispact: Goals Achieved in 2023 

Wispact has made significant strides in meeting our strategic goals and fulfilling our mission 2023. Some of our most notable achievements:

Ensuring Financial Sustainability: Despite economic uncertainties, we have remained financially resilient. At the end of 2023, Wispact was serving over 4,800 beneficiaries across Wisconsin with more than $201.5 million dollars in assets. Wispact completed an independent audit with no deficiencies or process recommendations.

Increasing Retained Fund and Wispact Foundation Impact: In 2023, Wispact’s Retained Fund grants to the benefit of Beneficiaries was $5.7 million with more than 2,800 individuals receiving assistance. Since 2020, the Wispact Foundation has supported 191 projects, with a total of $1.49 million in granted funds.

Building Operational Resilience: Wispact staff implemented process improvement with a web-based collaborative platform and client relationship system. A team-building staff retreat focused on inclusion and compassion care.

Expanding Outreach: Wispact staff exhibited at more than 40 statewide conferences events and made presentations to family groups, organizations, agencies, and national organizations. Wispact hosted the 2023 National Plan Alliance (NPA) conference in Milwaukee. First ever Financial Literacy workshop sponsored and organized by Wispact was held at a state-wide conference for families.

Fostering Collaborative Partnerships: We have strengthened partnerships with the WI State Bar and WI NAELA as well as other non-profits focused on providing services to individuals with disabilities, care management groups, and guardianship associations, and state agencies.

Embracing Diversity and Inclusion: Wispact has fostered a culture of diversity, equity, and inclusion within our organization by prioritizing inclusivity in our hiring practices, leadership development, and community engagement efforts.

Inspired by our mission, Wispact strives to enhance the well-being of people of all ages with disabilities across Wisconsin through the management of special needs trusts by promoting more choice and opportunities.

2024 Beneficiary and Advisor Survey 

Wispact constantly strives to better serve our beneficiaries and their advisors.

Please take our client survey about Wispact services. This short survey will be used to inform Wispact’s strategic planning.

It should take about 5 minutes of your time. There is a series of questions to be answered with a rating of 1 – 5 with 1 representing a poor score in need of improvement or disagreement to 5 representing a high score of service that is meeting or exceeding expectations:

https://www.surveymonkey.com/r/5B3YSGQ

Beneficiaries and Advisors: Please Update Your Mailing Address

To ensure that you and your advisors get important trust statements and tax information, please make sure your address and your advisor’s address is correct and up-to-date. If you are unsure if Wispact has the correct address – please contact your Beneficiary Specialist to update your information (see the staff phone listing for contacts).

MISSION STATEMENT »
“We enhance the well-being of people of all ages with disabilities across Wisconsin through the management of special needs trusts by promoting more choice and opportunities.”

About the Email Newsletter
Beneficiaries and Advisors – Wispact has switched to an email format for newsletters. If you would like someone to receive this (beneficiary or advisor), please reply to James Giese, Director of Communications, jgiese@wispact.org or call 608-268-6006 ext 209. To unsubscribe, click on the unsubscribe link at the bottom of the email or reply to this message with your unsubscribe request.

If you have questions about your trust account, please contact your Beneficiary Specialist.

Wispact, Inc.
226 Corporate Drive
Madison, WI 53714
(608) 268-6006 | F (608) 252-8449

For a staff listing: https://www.wispact.org/staff/

Wispact, Inc. is not a registered investment adviser, registered stock broker or broker-dealer and does not offer investment advisory services, programs or products. Any investment questions should be directed to qualified licensed professional financial advisers.