Audit your trust structure to ensure you never accidentally forfeit a massive step‑up in basis.
Based on: Your Trust Could Wipe Out One of Your Biggest Tax Breaks by Erin Talks Money | Erin Moriarity
▶ Watch the source video on YouTube
What if the trust your family spent thousands of dollars setting up is quietly costing you hundreds of thousands in unnecessary capital gains taxes? It sounds impossible, but it happens every single day to families who did everything right — or thought they did.
Here is the problem most people never see coming. The word 'trust' tells you almost nothing about what happens to your cost basis when someone dies. A revocable trust, an irrevocable grantor trust, a bypass trust — each one behaves completely differently under tax law, and the wrong structure can mean your heirs inherit $900,000 in embedded gains that could have been erased entirely. That is not a typo. Nine hundred thousand dollars, gone, because of how a document was worded years before anyone understood the stakes.
Erin Moriarity from Erin Talks Money has built one of the most trusted personal finance channels around exactly these kinds of overlooked, high-stakes details. In her three-part step-up in basis series, she walks through the real mechanics of how trusts interact with IRS rules — including Revenue Ruling 2023-2, which clarified a massive misconception that even advisors get wrong. She shows you side-by-side comparisons of three different ownership scenarios with the same asset, the same value, and wildly different tax outcomes for the family left behind.
Imagine sitting down with your estate attorney armed with exactly the right questions. You know whether your trust is revocable or irrevocable. You understand the difference between grantor trust status for income taxes versus estate inclusion for step-up eligibility. You know how portability has changed the math since 2011 and whether a bypass trust written in the 1990s is still working in your favor — or quietly working against you. That is the version of you this checklist is designed to create.
This PDF checklist distills every actionable insight from Erin's video into a clear, step-by-step audit you can work through on your own or bring straight to your attorney. You will identify your trust type, evaluate estate inclusion, flag bypass trust concerns, bust common myths about distributions and gains, and walk away knowing exactly what questions to ask next.
Stop guessing. Start with the checklist.
Every checklist item comes with actionable notes to guide you — things like "Don't forget to do this before you start," "Avoid this common mistake," or "Set a reminder for 30 days out." Nothing vague, just clear next steps.
+ 11 more action items inside...
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