Step up basis for property in life estate for capital gains

[lorims3kds]

My SIL had an irrevocable first party SNT. Upon her death her daughter received the property in a life estate as the tenant. When her daughter, the tenant, passes away, does the remainderman get a step up basis from her daughter or does the basis go back to the original price my SIL paid for the house?

Also, the tenant is disabled and on Medi-cal. When she passes will DHCS do an estate recovery on the property?

[lorims3kds]

Thank you for your response. No fraud was involved, it was drawn up by an estate attorney.  

[lorims3kds]

Thank you. 

[justme68]

Would there still be a step-up in basis with the new IRS rules regarding irrevocable trusts?

[justme68]

I apologize, I am confused, would the remainder man get the step-up basis or not? 

 Thanks for your response.