Arizona and New Mexico Personal Residence Trust Attorney
If you own a valuable residence that you wish to protect from creditors and want to pass to your children or grandchildren in a tax-favored manner, a qualified personal residence trust (QPRT) may be your best solution. A Qualified Personal Residence Trusts is an irrevocable living trust that allows a homeowner to gift the personal residence at a value that is discounted for tax purposes. The gift can be set up to remove the home from the personal assets of the property owner to reduce estate taxes upon death and to protect the residence from creditors.
Internal Revenue Service rules regarding property values, percentage of ownership retained by the grantor and the length of terms for the trust are complex. Morris Hall, PLLC has the experience and knowledge of tax law and IRS regulations to help you set up a QPRT using every legal advantage and benefit to your estate. If you have a home of some value, talk to us about the benefits of a qualified personal residence trust. We will explain the current law regarding capital gains tradeoffs in language that will help you understand your options and decisions.
Does a qualified personal residence trusts involve a permanent transfer of property?
A QPRT is an irrevocable living trust, generally set up for a predetermined length of time. If the resident dies while living in the home, before the term of the trust ends, the property will revert to the original estate and estate taxes must be paid on the fair market value. If the resident lives until the expiration of the trust, the property will be distributed to the named beneficiaries and the full value of the home will be excluded from estate taxes. It is important to weigh all factors carefully when contemplating the use of a QPRT. Of course, there are many stipulations as part of setting up a successful QPRT. Our experienced attorneys will explain the criteria and benefits to your estate, as well as possible drawbacks that may arise under certain conditions. Morris Hall estate planning attorneys know the strategies and options that can help make a QPRT the best option for protecting your estate, while keeping you in your home. Because a QPRT is an irrevocable trust, it protects, against creditors of the grantors and the beneficiaries, while significantly reducing estate taxes.