I'll do my best to try to keep this clear and to the point but I must admit that I am out of my element here.
A trust was setup by a grand parent in the 90s which was inherited by my parent in 2015 at which point it became "irrevocable". After 2015 the assets were never moved out of that original irrevocable trust until my parents passed away last year and it was passed down to me. The trust was under management at Morgan Stanley happily collected their 1% a year every year since it's inception. Now we come to find out that since the trust got it's step up tax basis way back in 2015 and the assets were never moved, we don't get a step up tax basis. This was as much a surprise to the advisor at MS as it was to us. At this point almost 80% of the trust is unrealized capital gains. We have talked to 3 CPAs so for all of which agree that we don't get a step up. This could have been a voided if the assets were moved out of the trust even just one month before my parent died. It seems to me MS failed to do their job in advising my parent on closing this original trust and setting up a new. Am I missing something here?
Thank you for reading.