TRUST EIN APPLICATION SERVICE

A conservatorship is a type of trust created as a result of a court order.  The conservator is appointed by the court to manage the financial affairs of an incapacitated person, minor, or older adult with limited capacity, known as the conservatee.

A custodianship is a type of trust created as a result of a court order for a minor or an incapacitated person.

Escrow is a legal arrangement when a third party holds onto an asset or funds on behalf of two other parties in the process of completing a transaction.  Money, securities, art, real estate, a website, as well as other assets can be held in escrow.  The third party (also known as the escrow agent) holds onto the asset or funds until both parties have fulfilled their contractual obligations.  For example, a company selling their wares to an international client wants to ensure they get paid when the goods reach its final destination.  The buyer of the goods only wants to pay for the goods once the goods are received and in good condition.  The buyer can place the funds in escrow with an escrow agent and give instructions to the escrow agent to only pay the seller once the goods arrive.  In such an arrangement, both parties are protected in the transaction.

The Federal National Mortgage Association, also known as Fannie Mae, is a United States government-sponsored entity as well as a publicly traded corporation.  The purpose of Fannie Mae is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities.  It allows lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market.  The mortgages are insured by the Federal Housing Administration, also known as the FHA.

The Government National Mortgage Association, also known as Ginnie Mae, is a corporation within the U.S. Department of Housing and Urban Development for promoting home ownership.  The entity was created to provide financial assistance to lower and moderate-income homebuyers by promoting mortgage credit.  Ginnie Mae pools and reroutes funds from the securities market to the mortgage market in order to increase the available credit for home buyers.

A guardianship is when a guardian is legally responsible for the care of someone (called a ward) who is unable to manage their own personal and property interests.  The ward usually requires the guardian's care due to incapacity, disability or infancy.  The guardian can designate who will be the ward's legal guardian in the event of the guardian's death.

An irrevocable trust is a trust that cannot be modified, amended or terminated without the permission of the trust's named beneficiary(ies). The grantor, after transferring the assets into the trust, no longer has rights to ownership of the assets and the trust. The grantor cannot revoke or annul the irrevocable trust.  The grantor can however dictate the terms, rules and uses of the trust's assets with the consent of the trustee and the beneficiary(ies).  Individuals who work in professions that may make them vulnerable to lawsuits, (i.e., doctors or attorneys) generally make use of irrevocable trusts.  Once the assets are transferred to the irrevocable trust, it is owned by the trust for the benefit of the named beneficiary(ies). Therefore, it is safe from any legal issues as well as from creditors.  The irrevocable trust must file IRS Form 1041 (U.S. Income Tax Return for Estates and Trusts).

A pooled income fund is a type of trust where the grantor (an individual, a family or a corporation) transfers their assets to a qualified 501(c)(3) charitable organization.  Those assets are then invested in a fund with other donor's charitable gifts.  This type of charitable mutual fund takes the pooled donations and invests it to provide dividends for both the donors and the charity.  The charity typically manages their own pooled income fund, and finances its operations with the donated securities.  The donations are tax-deductible and must be from personal assets. There are no capital gains taxes on the securities donated to such a pooled income fund.  After a donor passes away, the balance of the donation is given to a pre-determined charity(ies).

A qualified funeral trust is a trust created as a result of a contract with a funeral home.  An individual purchases funeral services prior to his/her death.  The qualified funeral home will hold or invest the funds in the trust prior to the individual's death.  The funeral home will use the funds within the trust to take care of the individual's final arrangements (funeral and burial services) upon his/her death.  The beneficiary of the qualified funeral trust is the funeral home.

A receivership is a process in which a legally appointed receiver acts as custodian of an insolvent individual, partnership or corporation during a legal proceeding. In such cases, the receiver is given full authority in the decision-making process and has full discretion in deciding how to manage the received assets, liquidate the assets and to pay back creditors.

A revocable trust is a trust whereby the grantor keeps the rights to repeal or annul the trust and can reclaim the assets placed within the revocable trust.  While the grantor is alive, the trust's income is distributed to the grantor.  When the grantor passes away, the revocable trust cannot be repealed or annulled and the assets are transferred to the named beneficiaries.  The grantor must file IRS Form 1040 (U.S. Individual Income Tax Return) for the trust income and also file IRS Form 1041 (U.S. Income Tax Return for Estates and Trusts) for information purposes.

A settlement fund is an account that is set up when an electing taxpayer is required to pay claims under IRC Section 468B.  This section allows a defendant to deposit money or property into an account, fund or a trust and obtain a full and complete release of liability.