When estate planning lawyers set up a Living Trust for a client, they should advise the client to take steps to transfer their assets–such as bank accounts–into the Trust. This process is called “funding” the Trust. Often when funding the Trust, a client will be confronted with a question such as “What is the Tax Id. number of this Trust?” So does a Living Trust need a separate Tax Id. number (also sometimes called an EIN)?
While the Grantor or Settlor (the person executing the Trust) is alive, the answer is simple: there is no separate Tax Id. number required for the Trust. Instead, the Trust uses the Grantor’s Social Security number. In the case of a joint Trust for spouses, the Trust can use either spouse’s Social Security number. One of the main reasons that no separate Tax Id. number is required is that the Trust is still revocable while the Grantor is living.
The only time a Living Trust requires a Tax Id. number is when the Grantor dies. At that time, the Trust becomes irrevocable. As a result, the Trust can no longer use the Social Security number of the Grantor. The successor Trustee must then apply for a Tax Id number for the Trust. Fortunately, this can be done fairly easily through the IRS’ site online.