The "Qualified Personal Residence Trust" (QRPT) provides you with a process for significant reduction in estate tax consequences of your family's home and vacation home. Often times our homes or lake homes are our most valuable asset in our estate plan. People will not always correctly plan what the estate taxes may end up being on their assets upon their death.
The QPRT permits an owner of a residence (grantor) to transfer ownership to an irrevocable trust. The trust is set up for a specific time period (i.e. 15, 20, or 30 years) for the Grantor to stay at the residence. After the chosen period of time the property is transferred back to the beneficiary of the trust. These are usually your children or grandchildren.
Once the property is transferred back to the trust, this is considered a gift from the Grantor with only the remainder of interest in the trust. It is very important that you are well versed and comfortable with the tax rules. You also need to be comfortable in the idea of possibly one day having to rent back your former residence from the trustee. Many people are not comfortable in this aspect of giving up their primary residence and choose a QPRT for transfer of a secondary residence, such as a vacation home.
Transferring wealth needs to be part of a well thought out comprehensive plan. When a QPRT is used it can help minimize estate taxes by the transfer of your residence to your beneficiaries at a reduced value. Take the time to meet with Top Law to help in understanding potential tax savings with important personal considerations when considering using a QPRT.
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TOP LAW is a Burnsville, Minnesota based law firm specializing in U.S. Immigration, Naturalization, Visa and Consular Law, Family Law, Divorce Law, and Estate Planning. Call Top Law Today! +1.888.214.6042, to schedule a time to learn more about planning for your and your family's future.
