When people think about estate planning, they usually think about wills and trusts—not obscure tax laws. But let us introduce you to one you should care about: the step-up in basis.
There’s been talk in Washington about eliminating it, and if that happens? Families could face massive tax bills on inherited property. Like, “sell Grandma’s house just to pay the IRS” massive.
Here at Voorhees Law Group, we’re watching this closely. And more importantly, we’re helping families do something about it now.
What Is Step-Up in Basis (and Why Should You Care)? Say your parents bought a home in 1980 for $100,000. It’s worth $1 million now. If they pass away, and you sell it at $1 million, you pay no capital gains tax under current law. That’s the magic of the “step-up” in basis.
But if this rule goes away? You inherit that $100,000 cost basis. Sell at $1 million? Boom—you owe taxes on $900,000 in gains. That’s a brutal surprise.
This Doesn’t Just Hurt the Wealthy Middle-class families stand to lose the most:
- Family homes
- Rental properties
- Small businesses
- Stock portfolios
You may not have liquid cash lying around to cover a huge tax bill—and that could mean selling off cherished assets just to stay afloat.
What Can You Do? (Hint: Start Planning Now) If the step-up in basis disappears, it’s not the end of the world—but it is your cue to review your estate plan. Smart strategies include:
- Use trusts wisely to shelter and transition assets
- Gift strategically while today’s laws still apply
- Invest tax-efficiently with Roths, 529s, and insurance-based tools
- Consider charitable giving to offset gains while making an impact
- Add life insurance to create cash flow for taxes or liquidity
Don’t Get Caught Off Guard The tax landscape is shifting, and waiting to “see what happens” could cost your family dearly. The best time to plan was yesterday. The second-best time? Right now.
At Voorhees Law Group, we help families protect what they’ve worked hard to build. We’ll walk you through the options so your legacy stays where it belongs—in your family’s hands.
👉 Request a free consultation to protect your home and your peace of mind.