Windfall From Trust

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
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Windfall From Trust

Post by MOInvestor »

*State of Missouri, USA
*Roughly 1 Million in Trust - Stocks
(Stocks are a mix of S&P 500 mutual funds & individual Fortune 500 companies)
*Age: 38-52 (Friend is 38)
*Reg Income of friend: 50k-60k
Split 6 Ways through family
Rough split is 166k
Will disperse 2023 tax year

A friend of mine & their siblings are about to receive a windfall from a trust. Essentially, they're about to receive options to receive a cash settlement or to receive the assets "in kind" (which are various stocks). Along with advising them to seek an estate lawyer, I wanted to ask some questions here in case there were some other items they should ask the trust about. Any thoughts or advice would be greatly appreciated.

Will they be able to request the stock be transferred or cashed out on a Step-up basis?
Is it possible to Step-Up stock from a trust?
Should they prefer to receive the stocks or cash out? (This seems like personal preference)
Is there a common practice to split stock rather than cash it out to split 6 ways?
One sibling is abroad & has been out of communication for decades, is there a time frame they need to collect their share or will it be held in perpetuity?
Are there any other items you would recommend they ask about?
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