A trust identification number is a number that identifies a trust, like any other legal entity, for tax purposes.   You need a trust identification number in order to put assets into your trust.  Your trust identification number will always be either 1) the Grantor’s Social Security Number, or 2) a number issued by the IRS, known as an Employer Identification Number, or EIN. An EIN is a number issued by the IRS which functions like a Social Security Number for the Trust.  In the context of a trust, it has nothing to do with employment.

Whether the Grantor’s Social Security Number or an EIN is used to identify your trust will depend on three factors:  1) whether the trust is Revocable or Irrevocable, 2) whether the Grantor is alive or has passed away, and 3) whether income-producing assets are being held in the trust.

A Revocable Trust is considered an extension of the individual who creates the trust, i.e., the Grantor.   As such, any income the Trust assets produce are reported on the Grantor’s personal income tax return, and while the Grantor is alive, the Grantor’s Social Security Number will serve as the trust identification number.

An Irrevocable Trust is a bit different, as it is most often used to separate a person from their property in order to preserve it for the Grantor’s beneficiaries at the time of the Grantor’s death.  If the only asset going into the trust is the Grantor’s home which doesn’t produce any income, then the trust identification number, as in a Revocable Trust, can be the Grantor’s Social Security Number.  However, if the Grantor is considering putting income-producing assets into the Irrevocable Trust, then an EIN should be obtained to be used as the trust identification number instead.

Regardless as to whether a trust is Revocable or Irrevocable, an EIN will also need to be obtained – if it was not previously obtained – when the Grantor of the trust passes away, as the Grantor’s Social Security Number will be deactivated and will no longer be able to be used to identify trust assets.

Getting an Employer Identification Number is a process which involves using information from the Grantor and the Trust to answer a series of questions for the IRS, which can currently be done online, by mail or by fax.  Once the questions are answered, the IRS will issue an EIN which will serve as the trust identification number.  If the process is completed online, the EIN will be generated instantly and displayed on screen.

To sum it all up:

  1. For a Revocable Trust, the trust identification number is the Grantor’s Social Security Number if the Grantor is alive and an EIN if the Grantor is deceased.
  2. For an Irrevocable Trust, the trust identification number is
    • the Grantor’s Social Security Number if the Grantor is alive, the Trust holds only assets that do not produce income, AND the Grantor has not elected to have an EIN assigned; OR
    • an EIN if the Trust holds income producing assets, the Grantor is deceased, or the Grantor has elected to have one assigned.

 

 

 

Lauren E. Soule
Russo Law Group, P.C.
100 Quentin Roosevelt Blvd., Suite 102
Garden City, NY 11530
800-680-1717

 

 

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