Trust avoid capital gain, but inheritance tax??? - Posted by Sara_CA

Posted by John Merchant on May 25, 2006 at 16:40:15:

Your lawyer who’s doing the trust for you (it needs to be a lawyer familiar with trust and estate (& inheritance if the RE is in CA) tax law in CA can answer this question.

If you’re trying to form a trust like this with no lawyer, I’d advise you to rethink it as a trust has definite rules and law that must be followed to make sure the grantor (you and sister) are really getting what you want.

Trust avoid capital gain, but inheritance tax??? - Posted by Sara_CA

Posted by Sara_CA on May 06, 2006 at 19:18:00:

My elderly mother and I own a property as joint tenants with rights of survivorship. We are putting the property in a living trust. I will be trustee/administrator. She will be primary beneficiary 100%, I will be contingent beneficiary 100%. If both of us die, my son will be trustee, and beneficiary 100%. My siblings all agreed to this. We do this so that I will get the “step-up” basis which allows me to use the value at the time of my mother’s passing as the “cost basis” when I sell the property. This is very important because the property value has risen more than 10X since we bought it.

Is there anything we are missing? When my mother pass away, will I have Inheritance Tax, or any other tax? This property is the single biggest possession we own.