- The grantor’s Employer Identification Number (EIN), which is issued by the Internal Revenue Service (IRS); or
- The grantor’s Social Security Number (SSN), which is issued at birth.
Both an EIN and an SSN function in the same manner in order to identify and fund a trust with assets. However, in some instances, one should be used over the other, which depends on certain factors, such as:
- Type of trust;
- The grantor is living or deceased; and
- Assets in the trust produce income, among others.
- Revocable Trust – Income produced by a grantor’s trust must be reported on his or her tax return, while alive. Here an SSN will be used as the TIN.
- Irrevocable Trust – This type of trust is often used to preserve assets for beneficiaries. Assets within an irrevocable trust, such as a house, will not likely produce income. Therefore, an SSN may be used as a TIN. However, if an asset that produced income is placed into an irrevocable trust, an EIN number should be used as the TIN.
However, regardless of these factors, both an EIN and SSN should be obtained for any trust, because once a person has passed away, his or her SSN will become deactivated.
How to obtain an EIN?
A grantor or agent acting on his or her behalf must correctly answer a series of questions for the IRS in order to be issued an EIN. The best and easiest way to complete this process is online through the IRS website.
The attorneys at the Law Offices of Hunziker, Jones, and Sweeney are experienced New Jersey elder law and estate planning attorneys. The firm helps individuals and their families handle all aspects of elder law and wills, trust, and estate, including the execution of a trust, execution of a Last Will and Testament, end-of-life planning, and asset preservation, among others. Our New Jersey estate planning lawyers are trusted by their clients to handle each legal matter with diligence and compassion. For more information, contact our New Jersey estate planning law firm at (973) 256-0456.