Q: Hi, my wife and I are co-trustees of a revocable trust in California. Will our home step up in value after the 1st death
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A:
In California, when one spouse passes away and they co-own a revocable living trust, the home held in the trust may indeed receive a step-up in basis. This step-up refers to the readjustment of the value of an appreciated asset for tax purposes upon inheritance.
With a revocable trust, the property remains part of the estate for tax purposes. Therefore, when the first spouse dies, the value of the home is reassessed at its current market value. This can be significantly beneficial if the property has appreciated in value since it was initially placed into the trust.
However, it's important to note that tax laws are subject to change and can be complex. It's advisable to consult with a professional knowledgeable in estate planning and tax law to understand the specific implications for your situation. This will help ensure that both your trust and estate plan are aligned with current laws and your personal goals.
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