Normally, your heirs receive a stepped up basis on most property transferred to them upon your death, regardless of whether the transfer is by will, trust, or other means. That stepped up basis is the far market value on the date of your death. The reason that estate planning attorneys use trusts as an estate planning tool is primarily to avoid the formalities of the probate process and make it easier and less costly for your heirs to take ownership of your property after your death.
This is a general statement based on the limited information provided. It is intended for informational purposes only. It does not constitute legal advice and does not create an attorney-client relationship.
You do not have to place the stocks in the trust to receive the step up in basis. You would do so to avoid probate. In Pennsylvania, the probate process is relatively simple. If the stocks are in your name, they will receive a step up in basis upon your death. If they are placed in the living trust, they will likewise receive the step up. The reason why is because it is what is known as a grantor trust. It has the same tax treatment that you have.
This response does not constitute the establishment of an attorney-client relationship. It is also not to be taken as firm legal advice as such would be contingent on a full inquiry by the attorney into the complete background of the facts and circumstances surrounding this matter. The response is meant to be a helpful guide to a question in a manner which reflects the limited information provided by the inquirer.
I agree with both attorneys. Property in your revocable trust is included in your taxable estate and would get a step up in basis. Placing cash and stocks in the trust would make sense if want to avoid probate of these assets and want to keep the assets private. Also, if you are sick or very old placing assets into the trust would allow easier and immediate access by your trustees at your demise.
Hope this helps.
Please remember to designate a best answer to your question.
Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is email@example.com , his website for more tax, estate and business articles is www.sjfpc.com. and his blog is
LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is firstname.lastname@example.org , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.