An A-B trust Part 2

[Max W]

This is about the wife's trust.

The wife's trust had 50% of the house as its only asset.

1. Should the house at the time of her death been retitled to include her trust.?   If that didn't happen, then the proceeds of sale of the house would have all gone to the survivor's trust - CA being a Com. Prop. state.   

2. If this was the case, does the B trust get stepped up basis, or does the basis remain as the FMV at time of death?

3. I don't think that a 645 election can be made as that would have had to be done sometime after her death.  Is that right?

 

 

 

[DANRVAN]

1 hour ago, Max W said:

1. Should the house at the time of her death been retitled to include her trust.?   If that didn't happen, then the proceeds of sale of the house would have all gone to the survivor's trust - CA being a Com. Prop. state.

The estate attorney should have taken care of funding the bypass trust (B trust).  It may not be to late.  I was recently involved in an estate where it took three years from date of death to close the estate and fund the bypass trust.   The funding date goes back to date of death.  If not funded, the purpose of the bypass trust is defeated.

 

1 hour ago, Max W said:

2. If this was the case, does the B trust get stepped up basis, or does the basis remain as the FMV at time of death?

The bypass trust gets stepped up basis on date of first spouse to die.  If it was never funded you need to talk to estate attorney.

 

1 hour ago, Max W said:

3. I don't think that a 645 election can be made as that would have had to be done sometime after her death.  Is that right?

There is 2 year window to make the election.  The B trust is not a Qualified Revocable Trust so the election does no apply.

Hope this helps.

[Max W]

DNRVAN, thanks. It does help.