Transferring your primary residence or vacation home into a qualified personal residence trust, or “QPRT,” can reduce your estate taxes. The QPRT is among the most common advanced estate planning techniques because a personal residence is often the single largest asset for tax purposes. The estate planning attorneys of Shatz, Schwartz and Fentin can help you determine if a QPRT is appropriate. For more about the basics of trusts, click here.

A QPRT allows a parent or older family member to “freeze” the present value of a residence or vacation home for estate tax purposes, resulting in future tax savings. The older family member can continue to live in the house while shifting future appreciation to the children.

The idea behind a QPRT is fairly simple. An older family member irrevocably transfers the residence into a QPRT, retaining a right to live there for a fixed term (for example, five years). At the end of the term, the residence passes to the children and is leased back to the parent. If the parent dies before the term ends, no savings are achieved.

We normally recommend that QPRTs be used in conjunction with other estate planning techniques. If you are considering a QPRT, we can help you decide the length of the term and which residences will qualify. Please call us if you are interested in learning more about QPRTs or other estate planning strategies.

For assistance contact attorneys Steven J. Schwartz, Timothy P. Mulhern, Ann I. Weber, Carol Cioe Klyman, Michele J. Feinstein, Gary S. Fentin or David K. Webber.