Client has 3 step children. She did not adopt them.

a. When she passes, is the tax consequence on the estate 15% for E beneficiaries.

b. if she left them an mutual fund account, do they get a step up in basis as E beneficiaries, but pay the 15% tax

or

c. do they get both: pay the 15% tax on the account and then also get the step up in cost basis?

or

d. are they treated as direct children?

thank you,
Douglas