The trust is dead; long live the beneficiary, but it's her problem now.  Seems to me it was a tactical move for the stepson to wait until the trust was terminated.  How is claiming its expenses on a 1041, any different from claiming them on the deceased grantor's 1040?  (Don't answer that, just thinking out loud.)  I'm not even sure the deduction would be allowed if we could still put miscellaneous deductions on Schedule A.  It has nothing to do with the production of income, unless perhaps an IRA distribution is involved.