Have you ever considered what would happen to your most valuable asset if something unexpected happened to you or your loved ones? Would your family be able to keep the house, or would it be lost to creditors, taxes or other external factors?
A Qualified Personal Residence Trust is a powerful tool to protect your home and ensure that it stays in the hands of those you care about most. In this blog, we’ll explore the ins and outs of QPRTs to help you determine whether this trust is right for you.
What is a QPRT?
This trust is a powerful tool for reducing gift taxes when transferring your home to loved ones. Through a QPRT, you can remove your residence from your estate, lowering the amount of gift tax you incur.
But how does it work? This trust allows you to retain an interest in your home for a set period, during which you can continue to live in the property. Once that period ends, your beneficiaries will receive the remaining interest in the house.
The property’s value during the retained interest period will be based on applicable federal rates provided by the Internal Revenue Service (IRS). This means the property’s gift value will be lower than its fair market value, resulting in lower gift taxes.
Protect your assets and loved ones
As you consider the future of your home and your loved ones, it’s essential to think strategically about protecting and preserving your legacy. While a QPRT can be valuable, it is just one piece of the puzzle.
By working with an experienced attorney and taking a careful approach to estate planning, you ensure your legacy endures. Take the first step today and build a brighter future for those you care about most.