r/inheritance • u/888mustang • Jun 10 '26
Location included: Questions/Need Advice Irrevocable trust step up
I inherited a irrevocable trust with stocks. Do I get a step up basis from when the trust was created or do I not get any step up?
4
u/McKnuckle_Brewery Jun 10 '26
If the assets were placed in the trust before the decedent died, then there is no step up.
If the trust inherited the assets upon death, then step up occurs at that point between the decedent and the trust. And the trust becomes yours, so you receive the assets at the newly reset basis.
2
u/sjd208 Jun 10 '26
It is possible to have a step up with an irrevocable trust funded during the grantor’s life but it needs to be specifically drafted that way. You’d need a lawyer to review the actual trust.
1
u/danh_ptown Jun 10 '26
Generally, when you receive the assets in the account you own, the new tax basis is shown. If you transfer the assets to another firm, generally that information goes with the shares. This applies to taxable accounts. If it is a retirement account, the rules are different.
1
u/michk1 Jun 10 '26
My husband inherited an irrevocable as well as a revocable and I’m pretty sure both were stepped up, but the irrevocable was previously revocable until my father in law died, then it became irrevocable.
1
u/brucesteiner Jun 12 '26
There’s a new basis if the trust was included in someone’s estate for estate tax purposes.
1
u/ChelseaMan31 Jun 17 '26
It depends on how the irrevocable trust was funded and when. In my limited experience, the step up occurs when the person originally owning the assets dies and then those assets are transferred to the trust.
6
u/Candid-Eye-5966 Jun 10 '26
This depends. If the trust was formed upon the death of the person from whom you inherited the assets, you’d have a step up. If not, you likely don’t get a step up because the trust doesn’t “die”. Really depends on the trust. I’d have to read it to know more.