Does My Revocable Living Trust Need a New Tax ID Number? (Episode 312)
0:31 Well, good afternoon everyone, all you Michiganders out there in this cold, cold winter weather. Today is Tuesday, January twenty eight, twenty twenty five, and of course this is Tuesday with Tom, Michigan's only weekly Internet show where we answer your questions about a state planning and a state settlement in Michigan. I'm your host, Tom Doyle, a state planning attorney, lifelong Michigan resident, an ambassador for all things good in this wonderful winter land called Michigan. Welcome to today's program. Well, I took a little time off over the holidays. I figure we're at the end of January, so we should start up with some new episodes. If you had been listening recently, you would know that the last episode was does Santa have to pay Gift Taxes? So I had a discussion during the last episode about gift taxes and gift tax obligations. So if you've got questions about gift taxes, I would encourage you to listen to last week's episode. Today, based upon conversations that had with clients recently, today's question is does my revocable living trust need a new tax ID number? But please remember what I'm about to discus us is as always for educational purposes only. It is
2:04 not intended to be legal advice. You need to work with your attorney and your tax advisor to determine what is appropriate for you and your state plan. So does my revocable living trust need a new tax ID number? Well, let's just start with some basic concepts. Revocable living trust. We're not talking irrevocable. Irrevocable is one that can never be changed. Revocable is one that can be changed. And it's the most common trust that people have as part of their estate plan. So it's think of it as a legal entity, or I always tell clients think of it as a box, and that you're putting assets inside the box, and the box is going to hold those assets during your lifetime and after your death, those assets are going to be distributed. Now, while you're alive, you are full control of the revocable trust, and because it's a revocable trust, you can change it. You can change the beneficiaries, you can change the trustee, you can get rid of the trust if you want to, and you can put assets into the box. You can take assets out of the box. Now, if you listen to previous
3:34 episodes of Tuesday with Tom or attended one of our seminers. You would also know normally people will look having a living trust one because they want to control the distribution of their state after they die, and or it could be multiple reasons. They want to avoid probate and or they want to maintain privacy of their estate. And if you have any questions about any of those, go on head on over to Tuesday with Tom and you can search for any of those topics and it will bring up a list of previous episodes where I've talked about all of those. But now let's talk about tax purposes during your lifetime. The IRS reviews your revocable living trust as what they call a grant or trust, and what that means is that any income and expenses of the trust are simply reported under your Social Security number. So if the income and expenses are going to be reported under your social Security number, there is no need to get a separate tax ID number for your trust. In fact, if you went online and applied for a separate tax ID number, many people will make a mistake in that application and perhaps have the IRS wanting all kinds of tax returns filed that aren't necessary. So again the IRS
5:09 is not going to require you to have a separate tax ID number. They are going to be satisfied if income and expenses are reported under your your so Security. The same thing's going to happen with tax returns. You're going to file your regular income tax returns using your Social Security number, so makes it easier for you. Now what happens, oh, when you die, Well, when you die, now the trust becomes irrevocable. That means it can't be changed. And once it can't be changed, now the IRS is going to look at it as being a separate taxable entity.
5:54 And once it becomes a separate taxable entity, that would be at the time of your death. Now it needs to have a new tax ID number, So during your lifetime, no new tax ID number. Upon your death, new tax ID number. Let's say though, that you are married and you have a joint trust. One of you dies, the surviving spouse can continue to use his or her Social Security number, so it's not going to become irrevocable until the death of both spouses, and that is the time that a new tax ID number would have to be obtained. Again, during your lifetime. Because it's a revocable living trust, there is no need to obtain a new tax ID number.
6:50 So the question or the answer to the question, does my revocable living trust need a new tax ID number? Short answer is during your lifetime no, after your death, yes, of course. If you have any questions about that, feel free to contact our office and we would be happy to assist you in having an understanding of that, or you can certainly contact your CPA or other tax advisor who ought to be able to explain that as well.
7:44 And always too the a reminder that Amanda and I would be honored to have the opportunity to help you protect your loved ones by putting together your estate plan, amending a current plan, or assisting you in settling in a state. We now have recently, as of last week, moved we're headquarters here in Grand Rapids to downtown in the heart of the government business district. So if you happen to be in Grand Rapids, we would be happy to have a consultation with you at our new downtown Grand Rapids location. We are also in the process of moving, hopefully if fingers crossed our Lancing location back to where it had been for very many many years on West Saint Joe Highway in the township. Fingers crossed that if everything comes together, that is going to be happening very soon where the place that you likely saw us in Lancing is going to be returning to the West Saint Joe office. We have a meeting on Monday to be talking to the landlord about making that happen. Of course, we also have our virtual consultation that would be either by zoom or telephone. All of that can be taken care of. Scheduling an appointment in person or scheduling virtual consultation Zoom or telephone can all be done by visiting Doyle LAWPC dot com, where you will find information about
9:18 how to get those scheduled, or you can always call the office at five one seven three two three seven three six six Remember two. If all you're looking for is a particular individual document, maybe you're simply looking at needing a new certificate of trust, or maybe you're looking at I just need a new durable power of attorney, I invite you visit our legal store again at Doyle LAWPC dot com. There you're going to find information on how you can order just individual documents. Through the website, you can make arrangements to pay for those documents that are going to be ordered, and those documents, if they're appropriate, will be prepared for you by us and emailed to you so that you can print them off and have them executed again. That would be the legal store at Doyle LAWPC dot com. Well, it's called outside and I think that is going to be it for today's program.
10:34 As always, ooh, if you have a question about the program, or a comment about the program, or a topic that you'd like to have me discuss, because many of the episodes you will find that a cover based upon questions that we've been asked or conversations that we've had. Head on over to Tuesday with Tom dot com. That's the website for Tuesday with Tom. There you're going to find a microphone. Click on the micro and you can leave a message asking your question or asking indicating a topic that you delict to have us discuss. Obviously, if it's a personal consultation type question, we're not going to answer that question over the air, or you can always send me an email. That would be Tom at Tuesday with Tom dot com. We also invite you staying current with what we are doing and other things that are happening in the state of Michigan. Follow us on Facebook and invite your friends and family to follow us again at Tuesday with Tom and follow the office itself at Doyle Law PC. And don't forget to join our emailing list.
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13:15 Stay safe. Tuesday with Tom has been brought to you by the estate planning attorneys at Doyle Law PC. To learn how we can help you with your estate plan or with settling a loved one's estate, please call us today at five one seven three two three seven three sixty six. That's five one seven three two three seven three sixty six.
