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April 5, 2024 / Press

Jon Forster speaks to MarketWatch About Property Inheritance and Capital Gains Taxes After the Death of a Family Member

Jon Forster was recently featured in a MarketWatch column answering a reader question about the correct tax basis to claim when selling the house of their deceased father and stepmother, which had been placed in trust.

“In a typical situation, you’ll get a step up when dad dies, and a second step-up with the stepmother,” Jon explains. He adds that there are two types of trusts – a bypass trust and a Qualified Terminable Interest Property (QTIP) trust.

“A bypass trust, otherwise known as a credit-shelter trust, is a structure that wealthy families use to avoid probate and estate taxes. For larger estates where there is going to be estate tax, there’s a benefit to a bypass trust,” Jon tells MarketWatch.

However, a QTIP is more common in second marriages as it allows the heirs control over the final disposition of the assets. Regardless of the type of trust, it is crucial to take steps to ensure that the property is properly titled to the trust.

“The biggest issues are logistics like that,” Jon explains. “People forgot to do the most important step.”

Read the full article in MarketWatch:

Our father died, then our stepmother passed away. Will my siblings and I owe taxes when we sell their house?

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