I owned property as a single man. Ten years later I got married. This property was placed into our trust.

Asked 12 months ago - Santa Clarita, CA

The grand deed now has the trust as owner of the property. How does this effect the cost basis if my wife or myself dies first?

Attorney answers (3)

  1. Charles Adam Shultz

    Contributor Level 19

    14

    Lawyers agree

    1

    Answered . You need to see your estate planning attorney. Unless you transmuted title to community property, the property remains your separate property. If your wife dies first, your basis stays the same. If the property were transmuted to community property the value would step up to fair market value regardless of the order of death.

    Note, the property is separate. If you were to get divorced, you keep it. If you transmute the property, your wife is entitled to half (this is a bit of a summary, there are some complexities that are not necessary to get into).

    The general advice above does not constitute an attorney-client relationship: you haven't hired me or my firm or... more
  2. Joseph Bernard Mchugh Jr

    Pro

    Contributor Level 11

    6

    Lawyers agree

    Answered . I agree with the prior attorney but want to add that if you wish to transfer the property to you as husband and wife in order to get the step up upon the death of the first spouse to die, make sure you use the words that you are hereby "transmuting" your separate property into community property and hereby hold it as Husband and Wife as Community Property with right of Survivorship. This gets a complete step up at the time of either party's death. Don't hold it as Husband and Wife as Joint Tenants as you will only get a step up on the deceased spouse's interest rather than a double step up in basis.

  3. Michael Leo Potter

    Contributor Level 19

    5

    Lawyers agree

    1

    Answered . There is both a tax-planning opportunity and an estate planning opportunity here. I strongly recommend you look on Avvo.Com under Find-A-Lawyer and seek counsel from an Estate Planning attorney ASAP.

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