What is a Trust?

A trust is a legal entity that allows one to transfer property, wealth and other assets to beneficiaries without going through the public probate process. The giving party (“trustor” or “grantor”) transfers stewardship to the holding party (“trustee”), who manages all relevant assets, tax obligations, debts and liabilities for the receiving party (“beneficiary”).

Trusts are created under state law, but also are taxed under federal law. Thus, a Federal Tax Identification Number is typically required. It’s important to meet requirements and create a trust in accordance with the law, because trusts help safeguard estates. They ensure that assets are properly distributed according to the trustor’s instructions.

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Why You Need a Tax ID to Form a Trust

Tax filing requirements for trusts vary depending on how and for what purpose the trust is officially formed. In many cases, you must apply for an Employer Identification Number (EIN) before you can create a new trust.

Also known as a Federal Tax Identification Number or Tax ID Number, this unique ID is what both state and federal government agencies use to track your tax status. The number identifies a trust (and other types of entities) similarly to the way a Social Security number identifies you as an individual. 

Typically trusts are required to file taxes when the trust has $600 in income or the trust has a non-resident alien as a beneficiary. , They are required to use IRS Form 1041 to report:

Income
Gains
Deductions
Losses

However, if the trust is classified as a grantor trust, it is not required to file a Form 1041, provided that the individual grantor reports all items of income and allowable expenses on his own Form 1040, U.S. Individual Income Tax Return.

Banks and other financial institutions may also ask for a Trust EIN number before doing business with any of the parties involved.

Revocable and Irrevocable Trusts

Although there are a number of different uses for trusts, the two basic types are revocable and irrevocable.

An irrevocable trust entails transferring an individual’s assets to the trust and surrendering all rights of ownership. The terms of the trust cannot be changed or terminated unless the beneficiary/beneficiaries grant permission. All irrevocable trusts must have a Federal Tax ID Number.

With a revocable trust, the trustor’s Social Security number and tax return are used to report the trust’s income. The trustor can change or cancel the terms of a revocable trust, which is also sometimes referred to as a living trust. When a trustor dies, however, the trust becomes irrevocable. At that time, his or her estate is required to obtain a Federal Tax ID Number.

How Trusts Are Used

In addition to ensuring that assets are distributed according to an individual’s wishes, a trust can also shield the parties from estate taxes, help keep financial information private and protect property from the creditors of the trustor’s heirs.

There are several types of special trusts, including (but not limited to) the following:

Conservatorships

Which involve a court-appointed individual managing the financial affairs of a minor or incapacitated individual.

Custodianships

Which involve a financial institution holding an individual’s assets, typically for safekeeping.

Guardianships

Which involve a court-supervised administrator overseeing the assets of a minor or an individual who is incompetent in the eyes of the law.

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Why Apply for a Trust EIN Number Through GovDocFiling

Applying for a Trust EIN involves filling out complex paperwork with the IRS. However, very few estate planners are prepared to navigate these confusing application forms or deal with lengthy delays. Fortunately, there is an easier and faster way to apply for a Trust Tax ID Number.

GovDocFiling offers a full range of filing, formation and tax support to help you get your trust up and running as quickly as possible. Rather than wade through complex legalese, you can use our simplified online form to easily apply for a Trust Tax ID. Streamlined and intuitive, our EIN application takes only a few minutes to complete. And it asks all the relevant questions for securing a Tax ID, no matter where you decide to form your trust.

Here are some additional reasons why estate planners choose to apply for Trust Tax IDs through GovDocFiling:

Our online EIN form is available 24/7, allowing you to start the application process at your leisure. This is in sharp contrast to the IRS portal, which is only available for select hours during weekdays.

Our tax experts will carefully review your Trust EIN application for accuracy to ensure there are no errors that might delay the approval process.

Our support team is also available 24/7 — unlike the IRS, which is closed during evenings, weekends and holidays.

We guarantee same-day delivery if application received by 3pm PST, with most trust applicants receiving their EINs in just a few hours.

All required fields in our EIN application are written in easy to understand English to minimize confusion and help you fill out the form quickly and easily.

Apply For Your Trust EIN Today

Whenever you’re ready, click on the button below and start the EIN application process. It takes just minutes to complete. Our tax-savvy customer service team is readily available by phone or chat during business hours or by e-mail to answer any questions.

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