Direct answer
Family estate lines stack stock, gifts, trusts, 529s, and ACA subsidies: the basis carries through, gifting changes the audit trail, and education funding rides the subsidy lines. Build the file in the transition year, not at death. The education plan is in the education guide , state tax lines in the reciprocity guide , and the comp archive in the records guide .
Updated November 9, 2026 · Reviewed against Internal Revenue Service
Family estate lines stack stock, gifts, trusts, 529s, and ACA subsidies: the basis carries through, gifting changes the audit trail, and education funding rides the subsidy lines. Build the file in the transition year, not at death.
The Lines
- Stocks & basis: stepped-up basis at death, gift basis carries, wash-sale windows across accounts; the family trail is in the family guide and the wash-sale rules in the wash-sale guide.
- Gifts & trusts: annual gifts, trust lines, and estate valuation; the 409A trail is in the 409A guide, and the 1099-B audit in the 1099-B guide.
- 529 & ACA: contributions, state deductions, FAFSA income jumps, and subsidy reconciliation; the enrollment windows are in the special enrollment guide.
The education plan is in the education guide, state tax lines in the reciprocity guide, and the comp archive in the records guide.
Put the rule into action
Write the letter with the free Severance Package Negotiation Letter generator. The state pages carry the local payout and notice windows, and the application tracker keeps the follow-up date in writing.
For most family wealth, the designation form controls, not the will. Retirement accounts, life policies, and HSAs pass to whoever is named on the carrier’s form, even if the will says otherwise. Audit the forms first.
- List every account: employer plans, rolled IRAs, HSAs, life policies, and annuities, with the carrier and the account tail.
- Pull the current designation for each, in writing, and check for an ex-spouse or a deceased beneficiary still named.
- Coordinate with trust language if minors or a protected beneficiary are involved; naming a trust requires the correct trust name and date.
- Confirm contingent beneficiaries so a simultaneous loss does not default to probate.
- Re-check after a job change, because a rollover creates a new account with a new form and no designation at all.
Read the direct rollover entry before moving plan money, and the HSA entry for how an account is treated at death. Both decide whether the transfer stays untaxed.
Basis, gifts, and wash-sale traps across accounts
- Inherited shares generally receive a stepped-up basis at death, which is why the date of death and the valuation records matter. Confirm the treatment with your CPA and current IRS guidance.
- Gifted shares generally carry the donor’s basis, so the gift record must include the original purchase date, price, and any adjustments.
- Wash sales can be created across accounts held by spouses or by an IRA, so a rebalance in one account can disallow a loss in another. Ask your CPA to check the lots before you harvest losses.
- Equity awards complicate basis: RSU basis is set at vest, options at exercise, and AMT adjustments can change capital gain later.
- Form 1099-B shows what the broker reported, which is not always what you paid. Keep lot records separately.
Use the equity vesting entry to map what each award’s basis should be, and keep the records in one family folder with the W-2 and 1099-B statements for the same year.
Education money inside the family file
Education savings are the asset most families never coordinate with the rest of the estate:
- Account ownership. Name a successor owner for the account, not just a beneficiary; otherwise the account may be frozen or pass by default rules.
- Beneficiary changes. Switching the beneficiary to another family member is usually allowed and can rescue a balance earmarked for a child who will not use it.
- State deduction recapture. Moving states can unwind a deduction already claimed; confirm the clawback with the program.
- Aid interaction. Savings and scholarship aid change need-based calculations, so keep the award letter breakdown.
- Coverage coordination. Household income lines affect marketplace subsidies; read the special enrollment entry and the 1095-C entry when income moves.
Send one request to the program and to your advisor: “Please confirm in writing the successor owner, the beneficiary options, the state deduction recapture rule, and how a withdrawal used for K-12 or a scholarship affects tax and aid.” Attach the answer to the estate file so nobody guesses later.
| Asset | How it transfers | What to keep |
|---|
| 401(k) or IRA | By beneficiary form, outside the will | Designations, rollover confirmations, 1099-R |
|---|
| Inherited shares | With basis set at the date-of-death valuation | Valuation statements and lot records |
|---|
| Gifted shares | With the donor’s carryover basis | Gift date, original cost, and adjustments |
|---|
| 529 account | By successor owner designation | Program rules and state deduction records |
|---|
Before you rely on a date or an amount on this page, check it against the California job exit rules page and the New York job exit rules page, along with the hiring references non competes guide hub. Rules move, and those pages carry the current text.
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Frequently Asked Questions
- Does my will control my retirement account?
- Usually not. Retirement accounts pass by the beneficiary form on file with the carrier or plan, so an outdated designation can override everything in the will. Pull the forms after every job change and rollover.
- What basis do my children get on gifted stock?
- Gifts generally carry your original basis and holding period to the recipient, which can create tax they did not expect. Keep a dated gift record with cost basis and adjustments, and confirm current reporting rules with your CPA.
- Can a wash sale be triggered in another account?
- Yes. Loss harvesting can be disallowed when substantially identical shares are bought in a spouse’s account or an IRA. Have your CPA review lots across all accounts before you harvest a loss.
- Who should be named on a 529 account?
- Name a successor owner as well as beneficiaries, so the account has a manager if the original owner dies or becomes incapacitated. Confirm the program’s wording in writing, along with the state deduction recapture rule.
Beneficiary designations, the plan's payout order, and the rollover clock are plan and federal rules, and continuation coverage after death is a state rule graded in this build. Confirm the continuation route with the state agency named on the state rule pages, confirm the beneficiary form with the plan administrator, and keep the designation date in the same file as the W-2 so the payout year has a source. Put the payout order and the dates in the application tracker so the plan clock and the estate file stay in sync.
Sources (official record — verify before filing)
Internal Revenue Service