22 Sep What happens to property values in a trust when the trustor dies?

Q. Is there a “step-up” value of income properties held in a revocable trust at the time of trustor’s death?
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A. Here’s how it works.

But first, note that you should consult with an attorney who can review the trust and make sure all the specifics of your situation are considered.

Under current law, in general, assets that you own at the time of your death do, in fact, get a step-up in basis for income tax purposes, said Naomi Becker Collier, co-chair of the Trusts & Estates and Elder Law & Special Needs Planning practices at Pashman Stein in Hackensack.

The tradeoff is that those assets receiving the step-up are also included in your taxable estate for estate tax purposes, she said.

“A revocable trust is usually within the control and for the benefit of the person that created it and is included in their taxable estate for estate tax purposes,” she said. “Therefore, assets held in a revocable trust usually receive a stepped-up basis at the time of the person’s passing.”

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This story was originally published on Sept. 22, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.