IBA Compliance Connection

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The son of a deceased customer presented us with a will listing him as the executor of the customer’s estate along with a tax ID number for the estate. However, the will does not appear to have been filed with the court, and the son does not have letters of office appointing him as executor. We declined to open an estate account since we generally require letters of office or a small estate affidavit. The son (who is an existing customer) was very upset by our decision and said he does not want to spend money on an attorney. However, we are unsure what to make of the fact that he was able to obtain a tax ID number for the estate. Wouldn’t an estate have to be opened for a tax ID number to be issued to the estate?

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No, an estate would not necessarily need to be opened with the probate court for a tax ID number to be assigned. The IRS Employer Identification Number (EIN) application provides for persons administering an estate to obtain an EIN and does not require proof that they have opened an estate with a probate court.

Although the son obtained an EIN, we recommend that you continue to follow your policy of requiring letters of office or a small estate affidavit to open an estate account. If the value of the deceased customer’s personal estate does not exceed $100,000 and does not include real estate, the son may complete a small estate affidavit, which does not require an attorney.

For resources related to our guidance, please see:

  • IRS Form SS-4, Application for Employer Identification Number (“Do I need an EIN? . . . IF the applicant . . . is administering an estate and needs an EIN to report estate income on Form 1041 complete lines 1–7b, 9a, 10–12, 13–17 (if applicable), and 18.”)
  • IRS Publication 559 (2019), Survivors, Executors, and Administrators (“The first action you should take if you are the personal representative for the decedent is to apply for an EIN for the estate. You should apply for this number as soon as possible because you need to enter it on returns, statements, and other documents you file concerning the estate. You must also give the identification number to payers of interest and dividends and other payers who must file a return concerning the estate. You can get an EIN by applying online at IRS.gov/EIN. Generally, if you apply online, you will receive your EIN immediately upon completing the application.”)
  • Probate Act of 1975, Article XXV, Small Estates, 755 ILCS 5/25-1(b)(6) (“Small Estate Affidavit . . . . The gross value of the decedent’s entire personal estate, including the value of all property passing to any party either by intestacy or under a will, does not exceed $100,000. (Here, list each asset, e.g., cash, stock, and its fair market value.)”)
  • Elements of Illinois Law: Estate Planning and Probate Administration 2015 Edition, Chapter 2.7, IICLE (“If the gross value of the decedent’s personal estate is $100,000 or less and the decedent was an Illinois resident, an affidavit may be used to transfer the property to the appropriate beneficiaries under the decedent’s will or those identified under the statute of descent and distribution, and formal probate can be avoided. 755 ILCS 5/25-1. The small estate affidavit procedure is not available if the decedent owned real estate in his or her name alone.”)