The Ins and Outs of the Personal Residence Trust

The Ins and Outs of the Personal Residence Trust

New Castle Business Ledger
by Nancy F. Blumberg, CPA, CFP
Simon Master & Sidlow, P.A.

Transferring family wealth has been limited by legislation so that many traditional estate planning techniques are no longer available.However, one of the remaining techniques which involves your personal residence has become increasingly popular.The use of a grant or retained interest trust has the potential to save you substantial estate taxes.

You can transfer your wealth to your children or others and retain the use of your home for a fixed number of years.By using a qualified personal residence trust (QPRT) you can avoid estate and gift taxes on any future appreciation in the value of your home and you can make this transfer as a relatively small taxable gift.The value of your gift is the value of the future interest of your residence.This will depend on the current value of the home, the current interest rates and the number of years you wish to retain your interest in the home.A QPRT can be used for your personal residence as well as a vacation home. More…