The Listen to Lawrence Letter: Stock Portfolio in a Medicaid Trust

CLIENT QUESTION:

I opened a trust with you approximately 7 years ago. Very Happy.

Question 1.) Will my stock portfolio receive a step up in tax basis upon my demise?

Question 2.) Upon my demise, can the trustees still make withdrawals, or does my Will supersede those instructions?

MY RESPONSE:

This is an easy one. Yes, all the assets in the trust will get a step up in tax basis, wiping out all the capital gain. Upon your death, the trustees will follow the instructions in the trust, not the Will.

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