You have to find the legal point of Property Ownership transfer. It doesn't keep transferring on death, so there is no step up, when it is already in a Trust or already Transferred or the names got added to the Deed. That's where people go wrong, and do stuff well-intentioned, but without legal guidance.

We've seen that on this forum, such as where the Daughter sold a house that she was originally on the deed (and helped buy) with both parents, then the parents put the house into their trust. Then they died. It's hard to address the proper tax treatment for that sale for the daughter, when essentially, someone who did not solely own the house stole it from that third person by putting it in the trust. She wanted a step up in basis for a home she didn't inherit, as well, if I remember all the issues. It's already in the Trust. She might be the beneficiary of the trust, but she neither owned nor inherited the home that was stolen from her.

In a nutshell.