During an escrow period, funds are held by a third-party before disbursement to the other parties. For escrow to be safe for all involved parties, those who have contributed funds to the escrow company cannot have access to those funds. Consequently, the escrow company is going to need to create an entity that has a separate EIN.
Generally, an escrow company is not going to hold onto assets for very long. Once the assets have been distributed, the escrow company will properly disburse the assets, and the assets will go back to being controlled by others. The only complication that could arise is if escrow is held for a particularly long time. During mortgage agreements, for instance, escrow funds will usually only be held for a matter of days. But if escrow is being opened for a legal dispute, it could be held longer.
An escrow account is a special type of account that is designed to only release funds in the event that the appropriate transaction has been concluded, and that everyone involved has fulfilled their end of the transaction. Consequently, it’s treated a little differently from other types of bank and trust account.