hi Lee Phillips here yeah I'm still a lawyer don't hold that against me I'm okay you don't
have to wash your hands nothing like that I want to talk to you for a minute about does
your living revocable trust need a tax ID number and there are trusts that do
need tax ID numbers I mean they file a 1041 but they're always going to be an irrevocable trust
the trust that you have for estate planning is a revocable trust your land trust is a revocable
trust and the IRS basically says if it's revocable it's you because you can revoke it get it back at
any time so we're going to treat it as you and you're going to pay the taxes on it that means
that your standard living revocable trust does not need a tax ID number you don't have to apply
for an EIN an employee identification number you don't have to do any of that crap you use your
social security number now if I've got a husband and wife and I've got a living trust use one or
the other if I use the husbands and he dies I gotta go down to the bank and change it to hers
until the trust becomes irrevocable which it will when both of you die we do not need a tax
ID number and I in the early years I mean in the early 80s living revocable trusts weren't
that well known and I was doing a lot of living revocable trust and I had to go down to the bank
and help out my client I'd go down and argue with the bank no you don't need a tax ID number
it's just the client's social security number that's what the IRS says they want
covered don't like it but we have the social security number you file your
1040. your trust will say that everything has to be paid out at least annually
that means not that you transfer money out of your bank account to another bank account that you own
paid out means you recognize it as your income the trust when it pays it out gets
a tax deduction for it so we're zeroing out your trust's income by having you take it
into your income and you file your 1040 just like you always did the bank reports it's
1099-R or whatever it is and you just have that on your social security number even though your trust
is the owner of your bank account now you're going to argue with them and I had a uh case
number of years ago I I did a trust for a for a doctor in Virginia and she had her credit union
and the credit union insisted on a tax ID number I called the credit union I talked to him no no we
got to have a tax ID number I finally said lady are you married to this credit union
and she said no and I said good and then take your money go down the street to the next bank
and put your money in the next bank they won't ask for tax ID number they'll take your social
security number which is exactly what she did she had no problem with the second bank and she moved
three million dollars out of the credit union somebody in the credit union needs to be fired
because you do not need a tax ID number I have a an e-book I'll give it to you okay just click
on the link or whatever you do and it's how to use a living trust and we go through stuff like
this in that ebook it's well written you'll like it so get the ebook and learn how to
use your living revocable trust but you do not need a tax ID number even if the bank says you
need a tax ID number now when mom and dad die then the trust is going to become irrevocable
and your heirs your kids are going to have to get a tax ID number and file a 1041 form and
go through all of this and tell the trust is wound up my trust won't be wound up for
years because I have investment real estate and I say kids don't sell the investment real estate
keep renting it get the income so my trust could go on for years and the kids will have to file a
1041. they'll pay all the money out every year so that the trust doesn't actually pay the tax
and you don't want your trust to pay the tax because the tax rates on a trust are hellacious
don't forget to subscribe and don't get a tax ID number for
your living revocable trust Lee Phillips talking about tax ID numbers for trusts