Qualified Personal Residence Trust
Giving It Away and Still Keeping It
The Qualified Personal Residence Trust, often called “QPRT,” is a tax planning strategy that allows you to transfer your home at a reduced tax value to your children, or other heirs, today, and continue to use and enjoy the home for a period of years.
All the increase in value in the home, between the time you place the home in your QPRT and the end of the time period you've elected for your trust, can pass to your children without being subject to the Federal Gift Tax or Federal Estate Tax.
Think of a house at the shore that is worth $500,000 today and is increasing in market value at the rate of 7% each year. In 10 years the value would be $1,000,000. If you are age 65 and the house is placed in your QPRT today for a period of 10 years the Federal Gift Tax will be assessed on a value of $194,000. At the end of the ten year period the trust terminates and your children now receive a home valued at $1 Million home. You have avoided Federal taxes on $806,000!
Speak with me to see how this tax planning strategy can be made a part of your comprehensive estate planning program.
