I (I will be John D Moon) am setting up an Irrevocable Medical Trust for my son (John D Moon Jr) with the Trustee being the son. The amount donated to the Trust will not be over $10,000 in any year so any interest a Bank will pay on a checking account will be very little little (less than the $600 exclusion). Thus no report to IRS each year.
You need to obtain an EIN for the trust, the SS# is inappropriate and no bank or other institution will allow you to set it up that way. Be aware that there are gift tax implications here. You may have to file a gift tax return here. Also note that the gifts to the trust will not qualify for the present interest $13,000 annual donee exclusion unless the trust is drafted with the so called "Crummey" provisions. If you do not understand this, you need to meet with an estates attorney; that is if do not want to create a big mess for you and your family.
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Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is firstname.lastname@example.org , his website is www.sjfpc.com. and his blog is
LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is email@example.com , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
1 lawyer agrees
Family Law Attorney
I would highly recommend having an experienced trusts & estates attorney prepare this for you. It is a very complex area of the law that even most attorneys who ddon't regularly practice trusts & estates law have difficulty navigating. And, once done incorrectly, can be difficult to undo or fix. The costs associated with preparing something of this nature are usually very reasonable and many T&E attorneys in Virginia provide fixed fee arrangements for this type of work, allowing you to know in advance exactly what the cost will be to have the necessary documents prepared, etc.
Also, I agree with the previous attorney that you will need a separate tax ID for the trust, as it is a separate entity from your son (i.e., the trustee and beneficiary). Attorneys who have a substantial T&E practice often obtain blocks of tax ID numbers from the IRS that can then be assigned to their clients' trusts (or the attorney can obtain a number for the trust from the IRS as part of the package of services they are providing to you -- i.e., both drafting the trust documents and setting up the trust).
This response does not create an attorney-client relationship and is intended for general information purposes only.
1 found this helpful
I agree with attorney Fromm. An irrevocable trust must have its own tax ID number.
Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.