How to fill out IRS Form W-9 for shared revocable living trust

[Island_Dreamer]

What is the name of your state? California

Hello,

Husband and wife are establishing a basic shared revocable living trust with both as co-trustees. This question is regarding IRS Form W-9, which will need to be filled out when assets (stocks, etc.) are transferred to the trust.

Let's assume that the legal name of the trust is Jones Family Trust, and the married co-trustees are Melvin P. Jones and Cassandra L. Jones.

After researching online and reading the form instructions, I believe that Form W-9 would be filled out as following, but I would very much appreciate confirmation that this is correct:

LINE 1: Melvin P. Jones and Cassandra L. Jones (with "Melvin P. Jones" circled since his SSN is used for tax reporting)

LINE 2: Jones Family Trust

LINE 3: "Individual/sole proprietor or single-member LLC" box checked

PART I (TAXPAYER IDENTIFICATION NUMBER): Melvin's Social Security number

Thanks in advance for your assistance!

 

[Taxing Matters]

I agree that for a grantor trust (and a revocable living trust is the most common grantor trust) that the information for the trust grantors is given, along with checking individual for the type of entity since for tax purposes all the income, deductions, and credits of the trust are treated as though they belong to the grantors.

 

[TrustUser]

normally there is nothing to be done, when transferring assets to your revocable trust

the trust will state something to the effect that income will continue to be reported under the grantor's social security number.

 

[Island_Dreamer]

I agree that for a grantor trust (and a revocable living trust is the most common grantor trust) that the information for the trust grantors is given, along with checking individual for the type of entity since for tax purposes all the income, deductions, and credits of the trust are treated as though they belong to the grantors.

Thanks very much for confirming that my understanding is correct and explaining how it works, too. From what I've seen elsewhere online, it appears that many W-9's for revocable living trust assets are filled out incorrectly, so my hope is that this information will help others with the same questions.

 

[Island_Dreamer]

normally there is nothing to be done, when transferring assets to your revocable trust

the trust will state something to the effect that income will continue to be reported under the grantor's social security number.

I'm not sure what you mean by "normally there is nothing to be done, when transferring assets to your revocable trust."

All titled assets included in the trust schedule(s) need to be retitled, in our case from joint registration to the name of the trust. Each mutual fund/stock holding company I've contacted to make this change has provided a stack of paperwork to fill out, including a W-9 form.

Am I misunderstanding something?

 

[TrustUser]

when i said nothing usually needs to be done - i was of course talking about the social security numbers, not the re-titling of the asset

to put another way, the transfer of the asset to the trust does not usually trigger any change to the tax id

if you are married and filing a joint return, one of your social security numbers is already being used to file the income tax return, correct ?

and that is usually the same number that will be used after the asset is titled to the trust

the basic gist here is that in a revocable grantor trust, THERE IS USUALLY NO CHANGE to the tax id number of the asset. whatever was used before the asset was placed into trust, is also the same tax id number used after it gets placed into the trust.

but i get why a stock fund wants you to fill out the form. so they have it on their records. banks do not require any new form - at least none that i have ever worked with. the bank account is already registered with a social, and the trx into a trust does not trigger anything new. the bank continues to send 1099s to the same social.

 

[TrustUser]

perhaps we could think about it in this way. let's say there is no new w9 filled out. the stock fund would send the 1099 to the social security number that it already has on file, which would be the social that you are still using.

 

[TrustUser]

one last point - have you actually called the stock fund about the w9 form ? just because they sent one to you as part of "the package" does not necessarily mean that you need to fill it out. it may be there for the sole purpose of being filled out ONLY if the tax id number is being changed.

 

[Island_Dreamer]

when i said nothing usually needs to be done - i was of course talking about the social security numbers, not the re-titling of the asset

to put another way, the transfer of the asset to the trust does not usually trigger any change to the tax id

if you are married and filing a joint return, one of your social security numbers is already being used to file the income tax return, correct ?

and that is usually the same number that will be used after the asset is titled to the trust

the basic gist here is that in a revocable grantor trust, THERE IS USUALLY NO CHANGE to the tax id number of the asset. whatever was used before the asset was placed into trust, is also the same tax id number used after it gets placed into the trust.

but i get why a stock fund wants you to fill out the form. so they have it on their records. banks do not require any new form - at least none that i have ever worked with. the bank account is already registered with a social, and the trx into a trust does not trigger anything new. the bank continues to send 1099s to the same social.

Thanks for clarifying that.

I agree that transfer of the asset to the revocable living trust does not usually trigger a change of tax ID number. The mutual fund/stock holding companies I've contacted have all told me that they have to create a brand-new account in order to change from joint tenants to the trust. They can't simply change the existing account. So that's probably another reason why they want a new W-9.

 

[TrustUser]

i see - that makes sense

 

[Taxing Matters]

Thanks for clarifying that.

I agree that transfer of the asset to the revocable living trust does not usually trigger a change of tax ID number.

The W-9 is not just used to get the SSN for tax reporting purposes. It is also to get the certification of whether the person is subject to backwithholding. Thus, even if the institution already has a SSN for the client, it may still ask for a W-9 to get a current certification as to whether the client is subject to backup withholding.