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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10104
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Mother just died, Father already dead. Parents have a

Customer Question

Mother just died, Father already dead. Parents have a revocable trust using Father's SSN. Bank wants a new EIN and to chance the trust to irrevocable. We are not making any changes just settling the estate and distributing money. Estate is well under $5 million. If the Trust name and date don't chance why a new EIN?
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
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Submitted: 6 months ago.
Category: Tax
Expert:  Lane replied 6 months ago.

Hi,

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When the second spouse passes, the trust becomes irrevocable (as the trustor is no longer alive to revoke it)

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The trust is now a separate taxable entity, and must have a tax ID as all other irrevocable trusts.

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This is just a legality. The bank likely cannot DO ANYTHING, because - when it was a revocable trust it was a passthrough entity and all taxation passed through to the grantor(s) of the trust's tax return.... Their systems are now looking for a tax ID for this trust.

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Also, if the trust has more that $300 of income, (more than $300 of income after the date of death) there will need to be a form 1041 (INCOME tax return of a trust or estate) done to report that income

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The bank will report that income (dividends, interest, rents, etc) on a 1099 to the trust rather than to the grantors as they could do while at least one grantor was alive.

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YOu can do this very easily online by going here: https://sa.www4.irs.gov/modiein/individual/index.jsp

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Then you'll simply give the ID to the bank

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Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the smile or stars on your screen, and then clicking “submit”)

I receive no crediting at all unless you rate in this way.

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Thank you!

Lane

I hold a law degree, (concentration in Tax Law, Estate law & Corporate law), an MBA, (specialization in finance & tax), as well as CFP and CRPS designations. - I’ve been providing financial, Social Security/Medicare, estate, corporate, both for-profit and non-profit, and tax advice, since 1986.

Expert:  Lane replied 6 months ago.

Hi, I’m just checking back in to see how things are going

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Did my answer help?

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Let me know…

Lane

Expert:  Lane replied 6 months ago.

Hi Jean,

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Did you see my answer?

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let me know if you need more here

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Lane

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