Contact UsIn California - clarification Of capital gain step up of a house and investment accounts on death of one spouse. True? Only if in living trust or titled as community property with right of survivorship?
Was hoping I could get clarification on a question I had about placing assets in our trust (and capital gain step ups if one spouse dies).
We live in California, a community property state. Our house is of course is in the trust as is our largest taxable investment account. (IRA’s of course have to be titled in either my name or her name depending on who’s it is. And my cash, CD accounts are essentially joint accounts as there are no capital gains and the beneficiaries are clearly outlined the spouse and contingently to our children).
I have three other investment accounts that are titled joint accounts, and was wondering if I should have these in the name of the trust as well. The kids and grandkids are contingent beneficiaries.
My question centers on the ability to fully step up the house and investment accounts that have capital gains upon the death of one spouse. With California being a community property state, I have read a few articles and it seems that you can step up these items fully (not just 50%) if they are in a trust or if they are titled as community property with the right of survivorship. But I think I have also read articles that even if it is a joint account - that it is still considered community property here in California? And as such The surviving spouse could do a full step up?
Just looking down the road to avoid any issues and ensure we minimize any taxes as appropriate.
appreciate any feedback as to if it really matters, or if we should place these other investment accounts in the trust. And confirmation that death of one spouse in California we can step up the entire value of the investment account and house, not just 50%.
Thank You. Bob
We live in California, a community property state. Our house is of course is in the trust as is our largest taxable investment account. (IRA’s of course have to be titled in either my name or her name depending on who’s it is. And my cash, CD accounts are essentially joint accounts as there are no capital gains and the beneficiaries are clearly outlined the spouse and contingently to our children).
I have three other investment accounts that are titled joint accounts, and was wondering if I should have these in the name of the trust as well. The kids and grandkids are contingent beneficiaries.
My question centers on the ability to fully step up the house and investment accounts that have capital gains upon the death of one spouse. With California being a community property state, I have read a few articles and it seems that you can step up these items fully (not just 50%) if they are in a trust or if they are titled as community property with the right of survivorship. But I think I have also read articles that even if it is a joint account - that it is still considered community property here in California? And as such The surviving spouse could do a full step up?
Just looking down the road to avoid any issues and ensure we minimize any taxes as appropriate.
appreciate any feedback as to if it really matters, or if we should place these other investment accounts in the trust. And confirmation that death of one spouse in California we can step up the entire value of the investment account and house, not just 50%.
Thank You. Bob
