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Ultimate Guide to Securing a Tax Identification Number- What You Should Know!

How to Find the Right Trust Attorney to Ensure Compliance

and what to expect when working with Hess-Verdon.

Your Orange County Trust Attorneys

 

Do you have to pay taxes on a trust fund from a  deceased family member

Yes, you will definitely need to seek a TIN number to assist you on the deceased family member Trust.  Now, to determine if there are taxes owed, will depend on completing all forms like to IRS 1041 tax return form.

Does an Irrevocable Trust Need a Tax ID Number?

When someone dies, a revocable trust changes automatically to an irrevocable trust.  So prior to death of the grantor/trustor, the Social Security Number (SSN) of the Trustor can be used and will suffice for managing taxes.  When the trustor dies, however, the revocable trust automatically changes to an irrevocable trust, and thus it is required to file for a Federal Tax Identification number (TIN | EIN). 

Read on..

1st Takeaway: If you are the Trustee, you have a fiduciary duty to manage the estate. Do not distribute the trust’s funds prior to setting up the TIN.  Why? If you distribute funds before you have determined all the taxes and expenses that need paying off, you may be personally responsible to pay back the differences to the party to which is owed.

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Serving State: California, Southern California

Serving Counties: Orange County, Los Angeles County, Riverside & San Bernardino County, San Diego County

Serving Cities: Newport Beach, Huntington Beach, Irvine, Costa Mesa, Laguna Beach, Newport Coast, Corona Del Mar, Santa Ana, Anaheim, San Juan Capistrano, San Clemente, Buena Park, Fullerton, Orange, Lake Forest, Laguna Hills, Garden Grove, Tustin, Yorba Linda, Fountain Valley, Westminster, Dana Point, Rancho Santa Margarita, North Tustin, Seal Beach, Los Alamitos, Villa Park, Ladera Ranch, Placentia, Laguna Woods, Aliso Viejo, Coto De Caza, State of California

 

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Irrevocable Trust Tax ID Number

We wanted to make this topic simple and created a list of steps to complete the trust tax id numbers.  These steps will allow you to understand the fundamentals of being a Trustee and how to manage tax implications.  First requirement. Get a TIN. You may have heard of applying for an EIN. The words are used interchangeably. 

How to Apply for a TIN for a Trust

When you have the TIN, you will be able to do the following:

  1. Apply for a Federal Tax ID number (EIN) / TIN. You can obtain an EIN number for a Trust Online.  It typically takes around 10 minutes to complete if you have all the information handy. Once validated, you will receive the nine-digit unique IRS tax identifier.
  1. You can report all income earned by the Trust under the TIN / EIN.
  2. Forms like SS-4 is used to gather information about the Trust including the following:
  1. Name of the Trust
  2. Trustee’s name
  3. Mailing address for the Trust.
  4. IRS will want to know the grantor’s Social Security Number (SSN)
  5. IRS will want to know the type of trust and the date the Trust was funded.
  • You can file an IRS 1041 tax return if the trust earned more than $600 in income during the calendar year. IRS form 1041 is also known as Fiduciary Return.
  • Can open a bank account under the trust name.

Schedule an appointment today. Our specialized team is ready to assist you.

Call 949-706-7300.

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Living Trusts, Estate Planning, Business Formation, Real Estate Law

Trust Litigation | Business Litigation | Real Estate Litigation

Jillyn Hess-Verdon

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Keith Van Dyke

Partner

James R. Cunningham

Senior Associate - Attorney

R. Kurt Ketchum

Associate Attorney

David Crumpton

Associate Attorney

Fee Arrangements Include:

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In some matters, when we negotiate some or all of the attorney fees on a contingency basis, the client may be held responsible for advanced costs.  

Some of the advanced costs (including, but not limited to)

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