We protect your family legacy, protecting your assets from future tax consequences, and developing plans for your future generations.
One document which may be suited for you is a Qualified Personal Residence Trust, or a QPRT, which allows you to transfer a residence at a reduced tax cost.
Qualified Personal Residences Trust
A Qualified Personal Residence Trust is a type of irrevocable trust that is designed to hold and own your primary or secondary residence and remove the value from your taxable estate. It can also allow the appreciated value of a residence to escape estate taxation.
Advantages
- Allows for a residence to be transferred at a reduced value for estate tax purposes
- Allows appreciated value to escape estate taxation
Disadvantages
- The donor must survive a specific QPRT term in order for the residence to transfer
- Once passed, the Donor must have alternative living arrangements planned for after the residence transfers.
- A QPRT is irrevocable: once established, the Donor can no longer take back the residence.
A QPRT may be an appropriate planning tool for you under the right circumstances. Specifically, consider:
1) Is the Donor healthy enough to survive the QPRT term?,
2) Does the Donor have finances in place to be able to part with their residence?
3) Is the Donor likely to face estate taxes?
4) Is there a desire to keep a residence in the family?
We can discuss whether a QPRT or other planning opportunities make sense for you. Please contact us today, so we can start helping you plan for the future.
