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A stepped-up basis can be higher than the before-death cost basis, which is the benefactor's purchase price for the asset, adjusted for improvements or losses. Because taxable capital-gain income is the selling price minus the basis, a high stepped-up basis can greatly reduce the beneficiary's taxable capital-gain income if the beneficiary ...
When you receive a property, you “step up” its value to the current market. For example, say your grandparent bought a house for $50,000 and passed it down to you after they died.
A revocable trust also called a living trust, is a good idea if the grantor wants to modify the trust after creating it or reclaim the assets. Alternatively, an irrevocable trust places assets ...
Trusts are often used as a tool to minimize estate taxes. Also, while assets transferred via a will usually have to go through the probate process, trusts can usually bypass that step, speeding up ...
Estate planning may involve a will, trusts, beneficiary designations, powers of appointment, property ownership (for example, joint tenancy with rights of survivorship, tenancy in common, tenancy by the entirety), gifts, and powers of attorney (specifically a durable financial power of attorney and a durable medical power of attorney).
However, a growing trend for husbands and wives is to create "joint trusts" where both are "grantors" of the trust, thus mirroring the familiar concept of joint tenancy ownership. [15] For a revocable trust, the grantor retains the power to direct transactions for the trust, even if a third party serves as the trustee. [16]
A revocable trust also allows you the freedom to change your mind about the trustees and beneficiaries. If family relationships, friendships, or business relationships change over time, you might ...
Nonprobate Transfers on Death: Rules governing nonprobate transfers, such as joint bank accounts, life insurance policies, and transfer-on-death (TOD) securities: 7 Trust Administration: Provisions governing management of trusts; fiduciary duties of trustees. The provisions of Article 7 have been superseded by the Uniform Trust Code.