Legal Question in Wills and Trusts in California

Living trust setup distribution after 2nd to die. In quote, "separate" -> different from trust so use beneficiary tax id and account (existing or new)?

"Division of Trust. Upon death of the surviving Spouse,... Trustee shall obtain a separate tax identification number for each Trust share...treat each Trust share as a separate tax entity in accordance with proper accounting rules and procedures."

he quote above allows many possibilities. The question is how informal can implement the quote? The range could be informal as on paper with each sheet with each beneficiary's ssn#, to each beneficiary with an account with ssn# (created by beneficiary or trustee for beneficiary?), to formal trust document with EIN? The less formal the better and simpler. Time is running out on distribution to get setup.

After you answer the above -

Thinking limiting the range to either:

a) on separate sheets of paper write a different tax id (ssn) and track who gets what. Later beneficiaries track where distribution goes into existing accounts or one they create for the purpose to hold distributed funds (IRS require this way?). They would track for their own 1041 (the account for this purpose better?) or rely only on the K-1?

b) I put directly into accounts, that have ssn, which they open and control.

I am thinking for the quote portion:

- "Trustee shall obtain a separate tax identification number for each Trust share"

that ssn is separate from the living trust's tax id (EIN) and from each other so ssn is a good answer.

- "treat each Trust share as a separate tax entity in accordance with proper accounting rules and procedures"

is the handling of the accounting or tracking of transactions and that separate entity means different from trust and each other (by putting in account only for distribution). How informal can the tracking be? not full blown but ...? or in the spirit without the detailed sub-steps?


Asked on 12/17/21, 2:55 am

1 Answer from Attorneys

Timothy McCormick Haapala, Thompson & Abern, LLP

This is WAY beyond what can be dealt with in a free internet Q&A forum. You need to talk to an estate planning and trusts attorney in your area.

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Answered on 12/18/21, 9:41 am


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