• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Is Revocable Living Trust Entitled to Step-Up Cost Basis?

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

J

jgu

Junior Member
What is the name of your state? Nevada

I have individually owned mutual funds with capital gains.
The mutual funds are NOT retirement assets.
I am married.
The beneficiary of the individually owned mutual funds is a revocable living trust.
My wife and I are co-trustees of the revocable living trust.
The beneficiaries of the revocable living trust are charities.
The revocable living trust is using the same taxpayer id/social security number as me.

Question: In the event of my death, will the revocable living trust be entitled to use the step-up cost basis of the mutual funds when they are sold by my wife?

TIA.
 


LdiJ

LdiJ

Senior Member
jgu said:
What is the name of your state? Nevada

I have individually owned mutual funds with capital gains.
The mutual funds are NOT retirement assets.
I am married.
The beneficiary of the individually owned mutual funds is a revocable living trust.
My wife and I are co-trustees of the revocable living trust.
The beneficiaries of the revocable living trust are charities.
The revocable living trust is using the same taxpayer id/social security number as me.

Question: In the event of my death, will the revocable living trust be entitled to use the step-up cost basis of the mutual funds when they are sold by my wife?

TIA.
Click to expand...
We don't do homework...sorry.
 
T

tranquility

Senior Member
Let me take a shot and say yes you will receive a double stepped up basis on the property. This is because both you and spouse assets in the trust will receive the basis in your community property state. However, specifics get complex. If you are going to do this, see an attorney who will sit down with both of you and talk about goals and risks. An estate plan is not the best when it is a one size fits all from a box or book. Also, I say "take a shot" because of your listing of a charity as a beneficiary. What is your goal? Why would you have a charity as a beneficiary of a living trust?
 
Last edited:
J

jgu

Junior Member
Thank you for your response.

The goal is to assure transfer of all assets to the designated charities without probate and a contest from avaricious relatives.

Should I pass before my wife, I wish her to have the benefit of the stepped-up basis.
 
T

tranquility

Senior Member
I guessed that. Are you sure you have set everything up properly? If you don't treat the beneficiaries properly you will have breached the fiduciary duty.
 
J

jgu

Junior Member
The trust was set up by an estate planning attorney. Presumably all the details are covered.

My concern is whether a living trust as a beneficiary receives the same step-up cost basis benefit as an individual.
 
You must log in or register to reply here.

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top