To protect assets and properties, setting up a revocable or irrevocable trust is often recommended. The short definition of a trust is a legal entity that is designed to take care of assets on behalf of an individual (or individuals), thereby making it possible to create a separate legal and taxable entity that holds onto those assets. However, because it is a separate entity, each trust often needs a tax ID (EIN) number.
Here’s what you need to know about getting a tax ID number for a trust:
- Do you need a tax ID number for a trust?
- What information do I need to apply for a tax ID number?
- How do I obtain a tax ID number for a trust online?
- How do I obtain a tax ID number for a trust via mail or fax?
- How long does it take to get a tax ID number for a trust?
- Does a trust need a tax ID number?
Not always,but usually. There are some rare situations in which a tax ID number isn’t needed: A living revocable trust, for instance, may not need a tax ID number because it will instead use the beneficiary’s tax ID number.
Most trusts, however, do: If it isn’t a grantor trust or if there are more than two parties creating the trust, then it does need a separate tax ID number. A separate tax ID number is going to be necessary to pay taxes for the trust, open bank accounts for it, and cut checks from it: all of the basic activities that a trust has to complete in order to be active and useful.
Getting a tax ID number for a trust is a fairly trivial process and should be done when the trust is opened so that the trust can take into possession the assets that it is designed to protect.
To apply for a tax ID number on behalf of a trust, you will need:
- Basic information about the trust, including the type of trust and the trust’s name.
- The name of the trustee and their personal information, including mailing address and SSN or ITIN.
- The name of the grantor (or grantors), including mailing address and SSN or ITIN.
- The date that the trust has been funded.
This is a similar process to applying for a tax ID number for an estate. In general, you should have the SSN or ITIN information of the principle parties, and the documents regarding the formation of the trust.
You can obtain a tax ID number for a trust online within an hour through a tax ID service. This allows you to immediately begin opening and managing bank accounts for the trust, as well as paying any relevant taxes. To obtain a tax ID number for a trust online, you will need all of the relevant information regarding the trust (such as the grantor’s information). From there, you can fill out a form online and have a tax ID number returned to you through email.
Getting a tax ID number for a trust online is the most convenient, expedient way to do so. While you can get a trust tax ID number through other processes, it will usually take more time (and may take even longer if the documents aren’t filed correctly the first time). As long as you have the relevant information about the estate, you can apply for a tax ID number online right now.
If you don’t want to apply for a trust tax ID number online, you can instead fill out the paper form. The paper form will ask the same information: the grantor’s information, the trustee’s information, and the information about the trust. You can fill this out digitally and print it or fill it out directly on the form, as long as the signatures are original and valid.
Once the form has been filled out, you can either send it in via mail or fax:
- Via mail: Your completed form can be mailed in and will be returned within four to six weeks. This is usually the least convenient way of applying for a tax ID number, because it takes so long. During this time, you won’t be able to open bank accounts for the trust.
- Via fax: Your completed form can be faxed in and will be returned within three to four business days. This is more convenient than mail, but it requires that you be able to both send and receive faxes, as the tax ID number will be faxed back to you.
Many people are hesitant to use the mail or fax option, because there is a significant amount of waiting time. There’s no downside to applying for a tax ID number online, unless there’s a specific reason not to do so.
A trust tax ID can be acquired very quickly, if you apply for the tax ID number online. Through an online tax ID service, you can get an EIN number within an hour. This enables you to immediately finish any paperwork or documentation for the trust.
On the other hand, the waiting time can be a little more serious if you decide to apply for an EIN number through mail or fax. If you’re applying through mail, you could be waiting up to six weeks for your EIN number to be returned. If you’re applying through fax, you could be waiting up to four business days for the EIN number to be returned.
A trust needs a tax ID number (also known as an EIN number) to open bank accounts, cut checks, pay taxes, and complete other forms of important documentation. Tax ID numbers are used for things like licensing and permits, opening credit accounts, and opening investment accounts, all things that a well-managed trust might potentially do, depending on the trust’s structure. A tax ID number can be acquired through a tax ID service.
Most trusts are going to need a tax ID number before the trust can be properly administered and managed. Working with a tax ID service makes it possible to get a tax ID number without having to jump through a lot of hoops.