The question of who needs an employee identification number (EIN) and under what circumstances, can be a complicated one. Each case is different. However, in general terms, an entity such as a trust, will need its own EIN if it is no longer considered a grantor trust.
The Purpose of an EIN with a Trust
The idea of giving a trust its own EIN is rooted in the concept of each legal arrangement having its own identity. For instance, if an individual set up a trust for himself and his wife—considered a grantor trust, because he is the individual who created it—he would typically use his own EIN for that while he is still alive. If, however, the grantor passes away, the very structure of the legal arrangement itself has changed. That is, his EIN would no longer be in effect, as he is deceased. His wife, on the other hand, could begin to use her own EIN if the assets in the trust are hers. However, if they are intended for others—children, relatives, organizations—she could not. Further, if she were to become incapacitated, the trust would need its own IRS EIN Tax ID, as it would probably have to be controlled by a family member or court-appointed trustee. That individual could check the tax ID status online.
Either way, the goal is to classify each unique legal arrangement as its own business and tax entity. This ensures that there is no muddying of the financial waters between personal resources and those of trusts.
Ultimately, the decision to get a new EIN for a trust is dependent on the unique circumstances of that case. Consequently, consulting with a qualified attorney is always your best bet.