Trusts Family Strategy
Browse our collection of articles on trusts family strategy from AE Tax Advisors.
Our team regularly publishes insights on trusts family strategy to help high-income professionals stay informed about tax planning opportunities and compliance requirements.
Frequently Asked Questions
What is the step-up in basis at death?
Under IRC Section 1014, most assets included in a decedent's estate receive a basis equal to fair market value at the date of death. This eliminates unrealized appreciation and, for real estate, wipes out accumulated depreciation recapture, which is why holding appreciated property until death is a core planning strategy.
How does estate planning interact with real estate depreciation?
Accelerated depreciation creates recapture exposure on sale. Holding the property until death converts that exposure into a permanent benefit because the basis step-up eliminates the deferred gain, which is why exit planning and depreciation strategy are decided together.
What is the difference between a revocable and irrevocable trust?
A revocable trust remains under the grantor's control, is included in the estate, and provides probate avoidance rather than tax reduction. An irrevocable trust generally removes assets from the estate for transfer tax purposes but gives up control and may have its own income tax consequences.
Should business interests be transferred during life or at death?
It depends on expected appreciation and basis. Transferring an interest expected to appreciate substantially removes future growth from the estate, while holding an appreciated low-basis asset until death captures the step-up. The right answer usually blends both.