Wispact Newsletter Fall 2022

Wispact Beneficiary and Advisor Satisfaction Survey

Wispact staff uses beneficiary and advisor feedback to improve our services. The Wispact Board uses this feedback to provide strategic direction to fulfill our mission 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.

Please take less than 5 minutes to provide us with your feedback. Responses are voluntary and confidential and will not be identified by the individual.

If you have any questions or would like to complete survey via phone with assistance, please contact James Giese, Director of Outreach, jgiese@wispact.org, 608-210-4265.

Take the Survey:

(Click on link or cut and paste into browser.)

Overview of 2022 Taxes

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, 2023 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 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 fund (ETFs) which must report dividends 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 1040 income tax returns.
  • A 1041 Fiduciary Income Tax return is prepared for 3rd party funded trust accounts and a 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, 2022?

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 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.

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).

Winter Tips for Beneficiaries

Keeping your home more energy efficient:

  • Setting the thermostat and leaving it
  • Putting insulation on windowpanes
  • Using a heating blanket on the bed

Look at status of energy bill:

Is their account paid in full? Is their account in danger of being shut off?

  • Do they qualify for energy assistance
  • Can they make an arrangement with their trust
  • Do they want assistance with budgeting?

Younger beneficiaries going back to school:

  • What are back to school needs?
  • What should be provided to the trust if beneficiary is looking to have tuition paid?

What household expenses can be paid for with funds in the trust: Overview of the process for paying someone to: rake leaves, clean gutters, etc.

  • The steps the service provider must take (paycheck)
  • What can the service provide expect to be reimbursed for?
  • If beneficiary wants to purchase supplies? Do they have an agent do they need a check. What can be ordered online?
  • Who can provide service (prefer licensed providers)

Is beneficiary taking advantage of Medicare Open Enrollment? (Open Enrollment for 2023 coverage starts November 1) 

Kia Vue – Beneficiary Specialist

Wispact has added another Beneficiary Specialist to ensure we meet the needs of our beneficiaries.
Kia Vue has been working in different areas of long-term cares, with her most recent experience as an IRIS Consultant – helping individuals in the IRIS program use their public dollars toward direct services and supports. In her spare time, she enjoys doing outdoor activities such as hiking and playing grass volleyball. If she could do one thing all the time, it would be to travel the world as she loves sightseeing. Kia can be reached at 608-268-6006 Ext. 223 or at kvue@wispact.org.

“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.