Do I need a tax identification number when selling real estate in probate or a trust?

The simple answer is “yes”, a tax identification number or EIN (employer identification number) is necessary when acting as an Inland Empire & High Desert executor, administrator or trustee.

How is a Tax Identification Number different than a Social Security Number?

During the decedent’s life, the trust is typically revocable and taxes are paid by the grantor as an individual using the grantor’s social security number (SSN). When the grantor passes away, the living trust then becomes irrevocable and the successor trustee will pay the decedent’s taxes via an EIN instead of the SSN. In the case that a trust was not completed, then the executor or administrator will also need an EIN when representing the estate. That’s the way the Internal Revenue Service (IRS) can be certain that any taxes owed by the decedent are collected.

How do I obtain an EIN?

Once the trust becomes irrevocable or the probate court has appointed the executor or administrator, a separate EIN must be obtained from the IRS. The trustee, executor or administrator will complete IRS form SS-4 and submit it to the IRS for approval. Once approved the trust or probate will be assigned an EIN. The EIN will then be used in lieu of the decedent’s SSN for the trust or probate assets and for tax reporting purposes.

Is an EIN always necessary?

The only scenario that a new tax identification number is not necessary is in the case that the trustee is also the surviving spouse and all assets have been left to the surviving spouse. When that is the case, the surviving spouse may use their own SSN for tax reporting purposes.

Other uses for the EIN

As the executor, administrator or trustee you’ll need the EIN to open a bank or brokerage account for the estate because all financial institutions use the EIN to report the interest earned on any of the accounts until the funds are distributed to the beneficiaries.