{"id":17275,"date":"2023-01-22T12:37:00","date_gmt":"2023-01-22T12:37:00","guid":{"rendered":"https:\/\/businessyield.com\/?p=17275"},"modified":"2024-04-10T08:34:31","modified_gmt":"2024-04-10T08:34:31","slug":"qprt","status":"publish","type":"post","link":"https:\/\/businessyield.com\/estate-planning\/qprt\/","title":{"rendered":"QPRT: Complete Qualified Personal Residence Trust Guide(+Quick Tools)","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"

What runs through your mind when thinking of an irrevocable trust to transfer assets to your beneficiary. A Qualified Personal Residence Trust(QPRT) is a type of irrevocable living trust you can depend on. It is designed to reduce the amount of gift and estate tax. Oftentimes, one incurs these taxes when transferring an asset to a beneficiary. This article is a quick tool to QPRT trust, rules, sales of residence, and unwinding a QPRT.<\/p>

What is Qualified Personal Residence Trust(QPRT)?<\/span><\/h2>

A Qualified Personal Residence Trust (QPRT) is an irrevocable trust that allows a creator to remove a personal home from their estate for the purpose of reducing gift tax rate incurred when transferring assets to their beneficiaries.<\/p>

It also allows the owner of the residence to remain living on the property for a period of time with a retained interest<\/a>. In this case, once the stipulated period is over, the interest remaining is transferred to the beneficiaries as a remainder interest<\/a>. However, the asset protection in this trust comes into effect partially because it is an irrevocable trust. Therefore, as a trust of this nature, it can protect the assets therein that it passes down to your beneficiaries. <\/p>

See Also<\/em>: Grantors Trust: A Simple definitive guide (Updated!)<\/a><\/p>

\"QPRT<\/a>
Female hand reaching for a house isolated on a white background. Image Credit: Parker Law Firm(QPRT)<\/em><\/figcaption><\/figure>

In other words, an irrevocable trust is basically transferred out of the grantor’s estate and into a trust, which effectively owns that property. This is to ensure that the property is passed down to family members at the time of death. In this case, a gift tax may be levied on the property’s value at the time it was transferred into the trust. <\/p>

Basically, the major property you can only transfer to the trust is your primary residence<\/a> and sometimes the secondary residence<\/a>. Meanwhile, you cannot transfer Investment or rental property. One important thing you should take into consideration when using this technique is that you will need to discontinue all rental activity prior to transferring the residence to the trust<\/p>

Read Also<\/em>: REVOCABLE TRUST: What is Living Revocable Trust?<\/a><\/p>

How Can One Set Up a QPRT?<\/span><\/h2>