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Wills, Trusts, and Estates
Question from caddisflyNov-2
My mother died four years ago and left a trust which contained her home.  Everything has been disbursed except the house.  It has been on the market and we have not been able to sell it all this time.  We decided to rent the house and need to know how we go about setting up the trust to do this.  Do we use the tax id number from my mother or do we need to apply for another one?  We never filed income tax forms on the trust since we had no income, only payments made for utilities and care of the house.  Do I need to file back taxes to prove that?  Lots of questions.  There isn't any money to hire a lawyer until we have money coming in from renting the house. Advice would be appreciated.  Thanks.
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Fallen Nov-3 85231.2
"Everything has been disbursed except the house."

Trustee(s) probably should have sold a few things to get money to talk with a lawyer, because it sounds like one or more folks don't understand what the purpose of the trust is (just a guess given how long the house has sat in the trust, since you don't mention what the trust says).
 
Not clear why the trust wasn't settled four years ago and the trustee(s) simply signed over the deed to named beneficiaries. 

"Do we use the tax id number from my mother or do we need to apply for another one?"

No, you don't use your mother's taxpayer ID.   She's dead, never mind that the house isn't hers -- it was evidently transferred into a trust. 

"Do I need to file back taxes to prove that?"

Sorry, what "back taxes"??

"There isn't any money to hire a lawyer until we have money coming in from renting the house."

I'm afraid someone needs to save up to at least consult with one -- which shouldn't be more than a few hundred.  If there's no mortgage on the place and it's worth something, a lawyer might take a collateral assignment of someone's interest in the place as security for repayment of legal fees. 

I suspect that what should happen here is that the trustees sign over ownership of the home to the named beneficiaries, and then those owners rent out the house.
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pg1067 Nov-3 85231.3

"We decided to rent the house and need to know how we go about setting up the trust to do this."

First of all, I'm not sure who "we" are, but I'll assume either that "we" are the trustees of the trust or that your use of "we" means that the trustee(s) is/are administering the trust in consultation with the beneficiaries.  As for "setting up the trust to do this," there probably isn't anything to do.  Absent some provision in the trust that might prohibit it, there's no reason why a trust cannot rent real property that it owns.

"Do we use the tax id number from my mother or do we need to apply for another one?"

Ugh...that you're asking this question four years after your mother died probably means that the trustee(s) has/have serious tax problems on his/her/their hand(s).  A tax ID number probably should have been obtained shortly after your mother's death, and the trust is probably now going to have to file three or four years of back tax returns, which may result in some serious tax liability for the trust, the trustee(s), and/or the beneficiaries.  The trustee(s) need(s) to consult with a trust/tax attorney ASAP.

"There isn't any money to hire a lawyer until we have money coming in from renting the house."

Well...the trustee(s) is/are free to take the risk of not consulting with an appropriate professional at this time, but my opinion is that it would be completely stupid not to do so.  If the trustee(s) must use his/her/their personal funds for this purpose, such is the consequence of making mistakes like this.  Sorry.

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pg1067 Nov-3 85231.4

"I suspect that what should happen here is that the trustees sign over ownership of the home to the named beneficiaries, and then those owners rent out the house."

That seems awfully unlikely, but we obviously have no idea what the trust says about this.  Of course, the trustee(s) and the beneficiaries probably could agree to do this.  However, doing so might result in some unpleasant and unexpected tax consequences, so they should be consulting with a tax professional before making any decisions.

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