A Qualified Personal Residence Trust or QPRT is an Irrevocable Trust specifically designed to take advantage of IRS rules to remove the value of the Grantor’s home from the taxable estate.
A QPRT can freeze the value of the Grantor’s residence as of the transfer into the Trust. The home is given to the trust, but the Grantor retains the right to live in the home. This retained right makes the QPRT a Grantor Trust. The trust is designed to last a certain number of years, and, if the Grantor outlives this time, the home passes to the beneficiaries. Because the gift is of a future interest, the value of the gift is reduced. If successful, the real estate passes to the beneficiaries using a fraction of the Grantor’s exemption.
If you have any questions about Qualified Personal Residence Trusts or any other estate planning topics, please contact us to schedule a free consultation. For more than two decades Klenk Law has focused only on Estate Law. We’ve seen it all, and this experience allows us to explain complex estate law and planning techniques clearly and concisely. We make it easy for you to understand QPRTs so you can make the best decisions for yourself and your family.