Revocable and living trusts allow the grantor (the trust owner) to control the trust until the trust terms are fulfilled. Then, the property goes to the beneficiaries after the grantor’s death. Step-up in basis typically operates the same way as stated above.
However, when it comes to irrevocable trusts, step-up in basis may work in several ways, since the method will depend on the structure and type of trust. For example, grantor trusts have different guidelines than non-grantor trusts.
Before you establish a trust, it's wise to speak with a financial advisor and estate planning attorney to guide you through all the ins and outs of the process. Partnering with professionals makes sure your trust fulfills your wishes after your passing and abides by federal and state laws.