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Business & farm
The answer to your question is that you will need to at least file a Form 1041 trust tax return for the 2016 tax year. Assuming that your mother-in-law's trust was a calendar year entity, that tax return would be due April 18, 2017. Additionally, if your mother-in-law received any income payable to her, or to her estate, after she passed away, that would need to be reported on a Form 1041 (for Estate) as well. (Thus, there could conceivably be two separate Form 1041s for her, for 2016 . . . her trust entity and her estate's income tax return).
Even if the trust wasn't technically closed out until January 2017, and again assuming that it was a calendar year trust, if there was no taxable income received in 2017 (and nontaxable income is also under $600), then you won't have to file a Form 1041 for it again next year (in 2017); otherwise you might have to. In addition, there are certain other "quirks" that apply to filing Form 1041 -- both in the "Do I need to file?" sense as well as the "When should I file" sense.
For those reasons you, are therefore respectfully encouraged to read the relevant sections of the IRS Form 1041 instructions (Who Must File beginning on Page 4) and (When To File beginning on Page 8), which are available at the following courtesy link:
https://www.irs.gov/pub/irs-pdf/i1041.pdf
Those instructions and the IRS examples there should help you further.
Assuming you are using the TurboTax Business program to complete your Form 1041 tax returns, if you have additional questions regarding filing deadlines, encounter any difficulties, or just want to speak with a live tax expert, please feel free to contact us. We would be happy to help you. Here is a link where you can create a support ticket and reach us:
https://support.turbotax.intuit.com/contact/
Please indicate when (if) you do so that you are a TurboTax Business products customer, and not a Free File edition personal user.
Thank you for asking about this.