Here at Bellomo & Associates, we often discuss estate planning strategies that protect assets. However, sometimes, the biggest threat isn’t a lawsuit or a lack of a will—it’s taxes.

 

There has been serious talk in Washington about eliminating the step-up in basis. Many people don’t even know this tax rule exists, but if it disappears, the impact on families could be massive.

 

Let’s break it down in plain English.

 

What Is Step-Up in Basis?

Imagine your parents bought the family home in 1980 for $100,000. When they pass, it’s worth $1 million. Under the current rules, you inherit the home at today’s value, so if you sell right away, you likely owe little to no capital gains tax.

 

But if the step-up in basis goes away? You inherit the original price tag. That means you’d owe taxes on $900,000 of profit… even if you’re just trying to keep the house in the family or pay the bills.

 

This Isn’t Just a “Rich People Problem”

People often assume these kinds of tax issues only affect the ultra-wealthy. But that’s simply not true.

 

The families most at risk are everyday folks who’ve worked hard and built wealth over time—through a home, a rental property, a small business, or an investment portfolio.

 

The worst part? Many of these families don’t have the liquid cash to pay a huge tax bill. So they may be forced to sell cherished assets just to cover what they owe.

 

What Can You Do Now?

The rules haven’t changed yet, but this is a wake-up call to get your plan in order. Here are a few steps we help families take:

• Trusts, the right way – A well-designed and funded trust can help minimize taxes and ease the transition.

• Smart gifting – Gifting during your lifetime can reduce the size of your taxable estate.

• Tax-friendly investments – Roth IRAs, 529s, and life insurance can offer protection.

• Charitable planning – Donating appreciated assets can help you avoid capital gains taxes and do good.

• Cash-ready solutions – Life insurance can provide liquidity to cover future obligations.

Don’t Wait for the Law to Change

Even if the step-up rule sticks around, having a plan that considers taxes is smart. If it goes away? You’ll be thankful you didn’t wait.

 

Let’s build a plan that protects your family’s hard-earned legacy—no matter what Congress decides.

 

👉 Register for a Workshop and let’s talk through your options.