Are You Familiar With Community Property Trusts?

An essential part of Estate Planning for married couples in California involving understanding basis.


  • Basis: Typically, this is what you paid for an asset, although it can sometimes be different for property that was given to you as a gift, rental property, or small business interests such as S Corporations or partnerships. Regardless of how you determine basis, it is important to know because it is used to determine gain or loss for income tax purposes.
  • Stepped-up basis: Assets are given a new basis when transferred by inheritance (through a will or trust) and are revalued as of the date of the owner’s death. If an asset has appreciated above its basis (what the original owner paid for it), the new basis is called a stepped-up basis. A stepped-up basis essentially wipes out the capital gains bill that would otherwise be owed and can save a considerable amount of capital gains tax when an asset is sold by the new owner. For jointly owned property, most married couples receive a step-up in basis for one-half of the value of the property.
  • Double step-up: For community property, the entire value of the property gets a basis adjustment step-up when one of the spouses dies, rather than only one-half of the property; hence the term double step-up. This double step-up allows a surviving spouse to reduce or even potentially eliminate his or her capital gains tax liability.

Community property trusts are one strategy, but they necessarily fit everyone’s circumstances.  It’s appropriate for married clients that have low basis assets that they’re comfortable holding onto until one of them dies. There are lots of other strategies to talk about, too. Call us to discuss your goals, and we’ll work together to keep the wealth you’ve worked so hard for within your family for generations to come.

STEP – Court Authorizes Service of John Doe Summons Seeking Information About Dutch Residents Using American Express Cards Linked to Non-Dutch Bank Accounts

TaxJustice Department Requested Authorization to Issue Summons Pursuant to Tax Treaty between United States and the Netherlands

A federal court in Texas authorized the Internal Revenue Service (IRS) to serve a John Doe Summons on American Express Travel Related Services Company, the Justice Department announced. The IRS John Doe summons seeks information about persons residing in the Netherlands that have American Express debit or credit cards linked to bank accounts located outside of the Netherlands. The summons is referred to as “John Doe” summonses because the IRS does not know the identity of the person being investigated.



5 Things Every New Mother Needs to Know About Wills

mom_daughterAs a new mother, you naturally want to ensure your new baby’s future in every way. For many new mothers, infancy is a time for celebrating new life, and making a will is the last thing on their minds. For others, the process of bringing new life into the world sparks intense feelings of wanting control and needing organization. Regardless of where you fall on that spectrum, you might be struggling to figure out what steps you need to take to protect your children’s future should the unthinkable happen. Here are five key things every new mother should know about wills. (more…)

Life Insurance and Estate Planning: Protecting Your Beneficiaries’ Interests

Family Portrait At ChristmasOne misconception people have about life insurance is that naming beneficiaries is all you have to do to ensure the benefits of life insurance will be available for a surviving spouse, children, or other intended beneficiary. Life insurance is an important estate planning tool, but without certain protections in place, there’s no guarantee that your spouse or children will receive the benefit of your purchase of life insurance. Consider the following examples:


How You Can Build an Estate Plan that Includes Asset Protection – Part 1

a3409582-29a9-4fae-bda6-e8736fb16025-thumbnailMuch of estate planning has to do with the way a person’s assets will be distributed upon their death. But that’s only the tip of the iceberg. From smart incapacity planning to diligent probate avoidance, there is a lot that goes into crafting a comprehensive estate plan. One important factor to consider is asset protection.