When a loved one dies with a revocable living trust, we receive this question all the time.
During your loved one's lifetime, their living trust was most likely a "grantor" trust, meaning the trust operated under their own Social Security number. This made things simple and easy for your loved one. But upon the grantor's death, his or her Social Security number cannot be used to manage the trust. The successor Trustee of the trust will need to get an EIN/TIN from the IRS in order to claim the trust's assets and generally manage the trust.
Once you receive an EIN from the IRS, the successor Trustee will be able to gather the trust's assets from the bank and other financial institutions. Without an EIN, the financial institutions will most likely not allow any movement of the assets.
In settling the trust, the trust may need to file a tax return upon/before final distribution on all assets. A trust needs to file a tax return if it has more than $600 in income during a taxable year. This means that simple trusts with outright distributions to beneficiaries will need an EIN, but may not need to file a tax return. Ultimately, we generally have our successor trustee clients work with a trusted CPA to confirm the tax issues.
If you are the successor trustee of a trust, you may need legal help to confirm your duties as trustee. If so, we have helped trustees settle many trusts, helping make sure our clients follow their legal duties and do not make mistakes in the process.
People who read this question may also look to the following questions:
- Do I need an attorney to help settle a living trust?
- What should I do first upon a loved one's death?
- How long does the Florida probate process take?