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Ask the Hammer: Do Trust Assets Get a Step Up in Basis?

Jeffrey Levine, chief planning officer at Buckingham Wealth Partners, discusses in this Retirement Daily video whether trust assets get a step up in basis.

When my dad passed away 30 years ago his will created two trusts for my mom: a credit shelter trust and a marital deduction trust.

The credit shelter trust is no longer in existence but the marital deduction trust is. It "owns" a deferred indexed annuity (no withdrawals to date, no income stream from it), checking account, and investments through a brokerage account.

My sisters and I are the beneficiaries of the trust. The trust is the beneficiary of the annuity. When Mom passes, what's the tax treatment of the annuity/checking and brokerage accounts? 

I'm assuming they're all included in her estate for estate tax purposes? Do they get a stepped-up basis before passing to the beneficiaries? 

That's the question Jeffrey Levine, chief planning officer of Buckingham Wealth Partners, answered in this episode of Ask the Hammer.

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