Do you need a tax ID number for a trust after death? Yes, you may, depending on the kind of trust setup you are dealing with.
In the case of a revocable trust, you have no choice but to get an EIN number for the trust after the death of the person who created it. Therefore, it would help to learn how revocable trusts work, both in life and death, and why an EIN (employer identification number) is essential.
Read More: Who Must File Income Taxes?
How Revocable Trusts Work
A revocable trust, also known as a living trust, is a legal document that grants a corporation or individual (grantor) the ability to place their assets into a trust for their own benefit when alive and their beneficiaries’ benefit when they die. The primary goal of a living trust is to ensure the assets within it don’t undergo the probate process, which takes a long time and can be costly.
Another benefit of creating a living trust is that you can revoke it whenever you want so long as you return the trust property to the original owners. And someone you choose to act as your representative doesn’t have the authority of transferring your assets, provided you did not legally grant them the permission to do so.
Revocable Trust Tax Treatment When Grantor Is Alive
Whoever creates and controls a revocable trust is responsible for any taxes associated with it when alive. As far as the IRS is concerned, the living trust does not exist for taxation purposes. You need to pay taxes on any income the trust assets generate.
As the grantor, you do not need a separate tax ID to pay taxes on trust income. Instead, you will use your Social Security Number (SSN). You will report your trust income together with all other income when filing your personal tax returns via Form 1040 or Form 1040-SR.
Read More: Form 1040: What You Need to Know
EIN Number for Trust after Death
Matters are a bit different when dealing with a revocable trust after death.
When a grantor dies, a revocable trust becomes irrevocable because it is no longer changeable and under the control of the person in question. Since the creator of the trust is dead, their SSN is no longer usable, and the trust requires a separate ID.
Therefore, upon death, a revocable trust will need a new TIN even in cases where the grantor had acquired one for tax filing purposes while alive. That tax ID is usually in the form of an EIN, which then enables you to file taxes, perform financial transactions and manage the assets within the now irrevocable trust.
Getting an EIN for A Trust
You can obtain a trust EIN via mail, fax or online. The online application process is the most convenient because it gives you the required ID within minutes. Faxing will require you to wait up to a week, while mailing an application form will result in a two-week wait.
You can apply for a revocable trust EIN by filling in an online form. Ensure you include all the relevant details, including the grantor’s personal information, trust name and dates. And then, after reviewing all the information, you can submit the application and wait for your identifier, which may be sent via email.
Application by Fax or Mail
To apply for a trust EIN by fax or mail, you must download and print the application forms first. The IRS Form SS-4 is the correct form to fill. You can obtain it via the IRS website.
Once you review your details and ensure they are accurate, you can fax or mail the documents to the following address if you live in one of the 50 states or DC:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
On the other hand, if you have no legal residence in the areas stated above, you can mail or fax your forms to:
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
Fax: (855) 215-1627 (within the U.S.)
Fax: (304) 707-9471 (outside the U.S.)
If you are a trust representative, ensure you get an EIN number for the trust after the death of the grantor as soon as possible. That way, the beneficiaries can begin to enjoy the trust distributions quickly.
- Nolo: Living Trust FAQ
- Nolo: Revoking Your Living Trust
- IRS.Gov: Abusive Trust Tax Evasion Schemes - Questions and Answers
- The Tax Advisor: Revocable trusts and the grantor’s death: Planning and pitfalls
- IRS-TaxID-Numbers: Obtain a Trust Tax ID (EIN) Number | Online EIN Application
- Gov Easy Filings: Trust Tax ID (EIN) Application
- IRS.Gov: "Where to File Your Taxes" (for Form SS-4)
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