Step Up Basis in Revocable Trusts

A revocable living trust transfers your assets upon aging out to the beneficiaries, free of probate. Probate can be expensive and time consuming. The true benefit of the living trust is the step up basis the beneficiary gains. A Step Up Basis is that a beneficiary inherits the property at the market value of the property at the time of inheritance. If the property is gifted prior to aging out, then there is not a step up basis. This would then have a capital gains tax on the appreciation, which at 15% could be thousands of dollars. By way of example, if a home were purchased twenty years ago for $150,000. At time of transfer through the Living Trust, the property could be valued at $450,000

Trust Decanting Ability

Previously, if someone wanted their Irrevocable trust to be amended, then they had two choices; get a court order or have all of the beneficiaries sign off on any amendment. As you could imagine, going to court is a long and expensive process, and having two or more siblings agree on anything is usually a non-starter (do you remember your Thanksgiving dinner where the seating arrangement creates the need for diplomacy). So, estate planning attorneys created the ability to “decant” the trust and create a new trust!! The ability to decant is a very powerful tool. It allows the trustee to remove the assets from the original trust and into a new trust. The reason for this ability is to have the

Featured Posts
Recent Posts
Search By Tags
Follow Us
  • Facebook Basic Square
  • Google+ Basic Square
  • White Google+ Icon
  • facebook

(786) 463-4463

North Miami Beach, Florida