How to avoid Capital Gains by placing property in a Living Trust

In California, real estate isn’t just where you live—it’s a tool for generational wealth. But without the right plan, it can create a massive tax burden for your heirs. Here's an example of how to help your heirs avoid capital gains taxes.

Imagine this: You bought a home for $200,000, and now it’s worth $2 million. If you pass it down without a living trust, your heirs could face huge capital gains taxes. Why? The IRS taxes the difference between what you paid and today’s value—$1.8 million of taxable gains!

Here’s where a living trust saves the day. By passing property through a trust, your heirs receive a step-up in basis to its current market value. If they sell, they owe zero capital gains taxes because there’s no taxable gain.

This works for more than just your primary home. A living trust also covers income properties, like rental homes and apartments, helping your heirs preserve wealth while continuing to earn income.

Want to know exactly how this works? I break it all down in today’s video blog. Don’t miss it!