Qualified Personal Residence Trusts (QPRTs)

Essentially, a Qualified Personal Residence Trust (“QPRT”) is an irrevocable trust funded by the transfer of a personal residence to a trustee while you retain the right to reside in the residence for a term of years.

At the end of the term stated in the trust, the value of the residence is outside of your estate and you no longer own the residence, however the trust does. If you desire to continue to live in the residence you may enter into a lease with the trust and continue to live in the residence subject to paying rent.

Benefit of using a QPRT

The main benefit of creating a QPRT is that achieving significant estate and gift tax savings, while retaining certain income tax benefits. The initial transfer of the personal residence to the irrevocable trust is a completed gift for gift tax purposes. The value of such gift, however, is computed under the actuarial tables promulgated by the IRS; these values fluctuate with interest rates on a monthly basis. Thus, the value of the gift (for gift tax purposes) is not the entire value of the property transferred, but the fair market value of the residence at the time of the transfer minus the value (as calculated under the tables) of the client’s retained right to use the residence for the term of years chosen. Therefore, the value of the residence may be removed from your taxable estate at a reduced value as well as removing all future appreciation of the residence.

Latest News

Grounds for Contesting a Will in Florida

Mon Jan 21, 2019

Disposing of one’s money, property, and other assets after one’s death is not a task to be taken lightly. As such, the law imposes a strict set of requirements on individuals wishing to execute a will in order to minimize the chances that there will be errors when distributing the […]

Full Read

Everything You Need to Know About Legal Capacity

Mon Jan 7, 2019

If you have ever witnessed a family member or close friend age into advanced years, you may have noticed that, at times, they do not seem as mentally sharp as they once were. Mental decline is an unfortunate, yet natural, part of the aging process, and it presents challenges for […]

Full Read

What Kinds of Behaviors Are Considered “Undue Influence”?

Mon Dec 31, 2018

In order for a will to be valid in the state of Florida, it must meet several requirements, including that the testator (the person making the will) has the requisite mental capacity to execute a will.  Concerns about the testator’s capacity, such as the testator suffering from dementia or a […]

Full Read
More News