EIN for newly irrevocable living trust, what's in a name?

[LifeTrust]

I'm successor trustee of "The John Doe Revocable Living Trust dated 01/01/2017", and my friend John Doe passed away in December, 12/15/2019, leaving real property titled in the trust and a residue via pourover will that is well under the small estate qualification in California.

I followed instructions as best I could on the IRS web site to obtain the EIN for the now irrevocable trust. My question has to do with the page that asks for the Legal name of the Irrevocable Trust. I looked at the abbreviated instructions, and followed that as best I could, entering,
"John Doe Irrevocable Trust 12152019". I entered my county and state and at the bottom and entered the date of death, December 2019. IRS gave me an EIN and listed the trust as "John Doe IRRV TR 12152019". That seemed fine, and one bank accepted it and gave me access to funds, but when I went to another bank to open an account, they told me I should have used the original name, with "John Doe revocable Living Trust" but without a date as part of the name. What? Another expert told me to keep the original name, because that is on the title of the real property. I called the IRS and got a verbal opinion that my first instinct was correct.

Does anyone here have experience with how the choice of name on the EIN application should play out?

-- don't want to be confused over what should be pretty easy...

 

[Taxing Matters]

Your friend should have chosen a name for the trust that omitted dates and description of the trust as revocable because the trust was not going to be revocable forever; when he died the trust becomes irrevocable. The name is significant because it is reflected on title records for the property the trust owns. I'd have advised your friend to simply "John Doe Trust" if he has (as most people do) just on the one trust. The name you choice for the EIN is an accurate description of the trust's current status but does not match the name for the trust which is on the title to the property the trust has. I think that the best choice for the name for the EIN application would have been simply "John Doe Trust" now, too. That said, the name you chose is an accurate description of the estate and should be sufficient. You may need to use the name your friend used to actually convey property to buyers or beneficiaries of titled trust property. But I doubt that they will care much that the name of the trust is a bit different on tax forms you may need to provide. Your bank is happy with it, and since it's an estate subject to the small estate procedures, that may be the most important thing for use of your EIN.

 

[TrustUser]

hi tm, it is my opinion that a trust should always have a date attached to it. property should also be titled with a date. i do agree that the word revocable should not have been used in the title.

i do something like the following : this revocable trust agreement has been executed between (grantor and trustee wording). the trust shall be known as the john doe trust, notarized on mon, day, year. this then clearly separates this trust from any other trust the grantor might choose to make. i of course make sure i have the trust notarized on that date !!

 

[LifeTrust]

Thank you for your quick reply. What your suggest, the simple "John Doe Trust" does make sense. To be sure, a lawyer did draw up John Doe's original trust and used the long specific name and date.

I'm glad you mentioned the deed to the real property. I know I have to file a notarized Affidavit of Death of Trustee with the county recorder. But I was worried about the deed itself, which is titled under the former long name. I thought I might have to file a quitclaim or new grant deed to change the title to the same as I have from the IRS for the revocable trust. I think you are saying no, not important to do that, but it may cause some confusion when it comes time to sell or convey. Is there any preliminary action I could take to smooth that over?

In general, does the word, "Living" carry any weight, as in "John Doe Living Trust"?

 

[TrustUser]

personally, i would just wait for escrow to send you whatever they want you to sign, when you are in escrow with the property. if you are using a realtor to sell it, i would tell them about it when you hire them.

most realtors have escrow companies they like, and officers that they can get hold of, to answer any specific questions.

i would say that "living" has little to nothing to do with anything. i never use it when i create a trust, because it is a useless word. something that you type, but doesnt do anything. trust names are long enough as it is. no need to make it any longer. i also will not use my own name. i try to use just 2 words that mean something to me, that are not particularly useful to anyone else. that way my name stays short, but still unique.

of course, i always have a date assigned to it, just in case !!

 

[Taxing Matters]

hi tm, it is my opinion that a trust should always have a date attached to it.

Some people do put the date as part of the name of the trust, but it's not really needed. If the person will create more than one trust then the trust names may simply be "John Doe Trust I", "John Doe Trust II", etc. That way, even if they are created on the same date they are still distinguishable from one another.

Of course the trust document needs to show the date that the trust instrument was executed, as does the deed for the transfer of property. That's a different issue than the name of the trust though. For the name, my approach is to keep the name simple, without dates or descriptions like "living" or "revocable" that really aren't necessary in the name and don't really add any value.

In general, does the word, "Living" carry any weight, as in "John Doe Living Trust"?

All that the phrase "living trust" (what lawyers call an "inter vivos trust") means is that the trust was created during the lifetime of the creator (grantor) of the trust. That is any trust other than a testamentary trust, which is a trust that is put in a will and is created after the death of the grantor. It will be apparent from the trust document that it is a living trust and so that doesn't need to be stated anywhere in the trust document.

 

[TrustUser]

hi tm,

i think i can buy that. i wasnt really worried about the trusts being created on the same date. rather that someone might want to make enough changes to his trust document down the road, that he creates a new document with all the changes, but leaves the name the same. i am not at all into amendments. especially when those amendments involve beneficiary names, or trustee names.

since the chance of that happening is probably still considerably less than 50%, what about john doe trust, and john doe trust II ?

when you say that the trust document needs to show the date the trust was executed, i am equating that to the notarization date on the document - correct ?

and then for ownership of real property it would still be granted to the john doe trust, notarized on mm/dd/yy ?

if i am understanding you correctly, this is a good way of doing it. this is how i already take ownership of real property.

so i may already be basically doing the same thing that you are talking about ?

but to make it more clear, perhaps my trust document should read somewhat like this. the name of the trust is the john doe trust. the trust shall take ownership as trustee of the john doe trust, notarized on mm/dd/yy ?

i know when i have made a trust to put a purchased property in, escrow always asks me how i want to take title. and then i respond as above - my name, trustee of the john doe trust, notarized on mm/dd/yy

for real property, i tend to use the street name and city name. so if i purchased a house on lemon street in new york, i might call it the lemon york trust

 

[LifeTrust]

Thank you for your advice and explanations, which confirm in more depth what I heard from the representative at the IRS. I'm a scientist, holding to Occam's razor, so keeping things simple is naturally appealing.

About the deed, I'll pose the question to a real estate broker, see what they say about it.