united-states trusts-and-estates income-tax
Death of a Grantor and taxes
<p>Imagine Paul sets up a defective irrevocable grantor trust for his daughter Mary. After the death of Paul, does the trust have to get an EIN number and file a separate tax return? Is there a way that Paul could have set it up such that Mary would not have to file a separate tax return for the trust?</p>
<p>I am in the United States. Also assume that the trust is govern by the UTC (Uniform Trust Code).</p>

<blockquote>
<p>Imagine Paul sets up a defective irrevocable grantor trust for his
daughter Mary. After the death of Paul, does the trust have to get an
EIN number and file a separate tax return.</p>
</blockquote>
<p>Yes.</p>
<blockquote>
<p>Is there a way that Paul could have set it up such that Mary would not
have to file a separate tax return for the trust?</p>
</blockquote>
<p>Not really, without effectively distributing the trust in full at the time. Trusts that are not grantor trusts and are not charitable trusts of some kind, are either simple or complex trust. But, both kinds of trust have to file a separate tax return, even though, <a href="https://www.thetaxadviser.com/issues/2019/sep/unexpected-tax-bills-simple-trusts.html" rel="nofollow noreferrer">in the case of a simple trust</a>, this is often not a difficult return to prepare.</p>
