Obtain a Federal Tax ID Number for Your Trusts.

If you find yourself setting up a bank or brokerage account for a trust, please obtain a new federal tax identification number for that trust.

Obtaining a federal tax identification number (also called an employer identification number) is very easy. With the right information, you can obtain one online in less than 60 seconds. Amazing that the IRS makes it easy with this link.

What does this mean?

Well, if you are handling trust administration after the death of a loved one. Say you were nominated to be successor trustee for your Dad's Living Trust. He passes away. You may need to open a checking account to deposit checks payable to your Dad's Living Trust. Once you obtain a federal tax identification number, you can safely open up a new checking account. This is important because any interest earned by the trust's checking account needs to be reported on behalf of the trust.

Or let's say you are splitting a trust into two separate share trusts as part of distribution plan. Be sure to get new federal tax identification numbers for each separate share trust. Don't use one federal tax identification number for multiple trusts. There's no reason to do so.

Furthermore, if you use your own social security number or another trust's federal tax identification number -- you are misreporting trust income. It's so easy to get this taken care of from the get-go. Can I just say get your own number?