I recommend going to a tax professional and/or an Estate lawyer.
Most likely dickcaro is correct and it will get a 'step up' in value, which means most likely there will be little or no tax due.
However, that wording in the trust MIGHT be a bad thing. It MIGHT mean that the trust will pay any taxes, which would be quite a bit higher than if the individuals pay that tax. But again, until the trust is thoroughly read, it is impossible to know what it going to happen.
You need a CPA or lawyer who is knowledgeable in wills, estates and trusts. If still living, the one who prepared the trust would probably be best. But the bottom line is, because of all the possible scenarios at BOTH the federal and state level when it comes to taxes, you need legal representation that you can personally hold legally and financially liable for the information and advice they give you. You do not have that protection in this public user-to-user forum. Please seek professional help with a pro that you can look in the eyeballs and make it clear that you are holding them financially and legally responsible.
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