Spouse has questions about living trust
DEAR BOB: Our house is owned under my living-trust name. If I survive my husband, will the basis for the house be stepped up to market value as of the date of his death? Should I add my husband’s living trust to the deed? –Eliza W.
DEAR ELIZA: If the title to your house is in the name of your living trust and it is not a joint living trust with your husband, if he dies before you do, there’s nothing for you to inherit. Therefore, you won’t receive any stepped-up basis to market value on the date of his death.
However, if you and your husband have a joint living trust and he dies first, in a common-law state you will receive a new stepped-up basis to market value for the 50 percent inherited from your husband. But if the residence is held in a community property state with both spouse names on the living trust, if your husband dies first then you receive a new 100 percent stepped-up basis to market value.