Can a Revocable Trust Use a Social Security Number?

A revocable living trust is a legal arrangement where an individual, known as the grantor, transfers assets into a trust but retains control over them during their lifetime. This structure allows for the management and distribution of assets, often outside of the probate process. A primary question that arises for those establishing such a trust is what tax identification number it uses for reporting purposes.

Tax Identification During the Grantor’s Lifetime

While the grantor of a revocable trust is alive and legally capable, the trust uses the grantor’s own Social Security Number (SSN) for all tax-related matters. The Internal Revenue Service (IRS) views this type of trust as a “grantor trust,” which means it is a disregarded entity for tax purposes. This classification exists because the grantor maintains control over the trust’s assets and can alter or revoke the trust at any time.

Consequently, the trust itself does not file a separate tax return. All income, deductions, and credits generated by the assets held within the trust are reported directly on the grantor’s personal income tax return, Form 1040. When financial institutions holding trust assets request a taxpayer identification number, the grantor’s SSN is provided.

This arrangement simplifies tax administration significantly during the grantor’s life. The financial activities of the trust are seamlessly integrated with the grantor’s personal tax situation, reflecting the grantor’s continued control and economic interest in the trust’s holdings.

Tax Identification After the Grantor’s Death

Upon the death of the grantor, a revocable trust automatically converts into an irrevocable trust. This transformation is a direct consequence of the grantor no longer being able to amend or revoke the trust. Once this happens, the trust can no longer use the deceased grantor’s Social Security Number for tax identification.

The trust is now considered a separate legal and taxable entity in the eyes of the IRS. The successor trustee must obtain a new tax identification number for the trust. This new identifier is not an SSN but an Employer Identification Number (EIN). The EIN is required for the trust to file its own income tax returns (Form 1041) and to manage the trust’s assets, such as bank and investment accounts.

Information Needed to Obtain an EIN

The successor trustee will need the official legal name of the trust, which is typically found in the trust document and often includes the grantor’s name and the date the trust was created. The application also requires the name of the trustee and their own tax identification number, which is usually a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). The trust’s mailing address must be provided, which is the address where the IRS will send official correspondence.

The Application Process for an EIN

The IRS offers several methods for submission, with the online application being the fastest and most common approach. The online portal guides the applicant through the required questions, and upon successful completion, the EIN is typically issued immediately. This online service is available during specific business hours, generally Monday through Friday.

Alternatively, the trustee can submit a completed Form SS-4, Application for Employer Identification Number, by fax or mail. If applying by fax, the processing time is approximately four business days. Applying by mail is the slowest method, with a processing time that can extend to several weeks. The mailing address and fax number for submitting the form are available on the IRS website and in the instructions for Form SS-4. Regardless of the method chosen, the application itself is a free service provided by the IRS.