Does a spouse trust have to have its own EIN number when you set up the spousal trust. How is the spousal trust taxed?
I am not sure I understand your question. A spouse's trust within your trust? Or does each spouse have their own trust? Generally, with a revocable trust, you use your individual social security numbers for your trust during lifetime. Upon death, the trust becomes irrevocable and can no longer use the social security number of the decedent. At that time, an EIN must be obtained.
If that does not answer your question, please feel free to post additional details.
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Elder Law Attorney
There would be a written document stating that a spousal trust has been created. The spousal trust needs to have its own EIN if it becomes irrevocable or sometimes even when it is revocable depending on who the trustee is.
The trust income is taxed depending on the terms of the trust. If the trust requires the income to be distributed to the beneficiary, the beneficiary receives a K-1 and reports it on their 1040. If the trust gives discretion to hold the income in trust and there is no distribution during the tax year, the income may be taxed at the trust level.
You should really talk to an attorney. Most will give you a free consultation.
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