DO BOTH IRREVOCABLE TRUSTS AND LIVING TRUSTS REQUIRE AN EIN?
Traveling and Business
It is indeed quite challenging for people like me who is always traveling and yet running a family business. I need to make sure that everything is covered. This is one of the reasons why despite my busy travel schedules, I pause and review my business activities so that when anything untoward things may happen everything is already in place.
One of the few things which are very important to do is establishing a Trust.
What Requires An EIN?
Establishing a Trust has several advantages. Not only is it a great way to help ensure that your assets are distributed according to your plan after your passing, but it can also lower costs and help avoid probate court for your loved ones. Setting up a trust can take a bit of effort and, like almost everything else, Trusts are taxable. This means that you will need an IRS-EIN-Tax-ID. Here is what you need to know about how to get an EIN for a trust:
Irrevocable Vs Revocable Trusts:
You have two options when setting up a Trust. One option is having a Revocable Trust, which can be changed by you during your lifetime. If you are uncertain about how you really want to distribute your assets, a Revocable Trust may be ideal. A Revocable Trust will not need its own IRS-EIN-Tax-ID and instead will use your Social Security Number. The other option is setting up an Irrevocable Trust, which cannot be changed without the approval of the Trustee. This type of trust will require its own EIN number. Upon your death, a Revocable Trust will become an Irrevocable Trust.
When Will You Need An EIN:
You will need to complete a federal EIN application if you are setting up an Irrevocable Trust. If you have a Revocable Trust, the paperwork will need to be filed by the Trustee or another reliable individual after your death. Fortunately, filing for an EIN can be easily done online through a trusted partner. You can also fax or mail an EIN or estate EIN application but be aware that these methods will take several weeks longer than online filing.
Choosing to create a Trust is a personal decision and should not be taken lightly. Once you’ve decided on the type of Trust that you wish to establish, you can go ahead and file your EIN paperwork.
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