Qualified personal residence trusts: Recent developments

The transfer of a residence to a qualified personal residence trust (QPRT) can provide substantial estate tax savings while preserving the client's use and enjoyment of it. The QPRT was created in 1990 under IRC Section 2702 and regulations thereunder permitting a personal residence owner to gi...

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Bibliographic Details
Published in:Trusts & estates 1995-06, Vol.134 (6), p.48
Main Author: Kahn, Jeffrey B
Format: Magazinearticle
Language:English
Subjects:
Beneficiaries
Estate planning
Estate taxes
Fair market value
Fractional interests
Gifts
Houses
Internal Revenue Code
Qualified personal residence trusts
Remainder interests
Section 2702
Tax benefits
Tax rates
Vacation homes
Vacations
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Summary:The transfer of a residence to a qualified personal residence trust (QPRT) can provide substantial estate tax savings while preserving the client's use and enjoyment of it. The QPRT was created in 1990 under IRC Section 2702 and regulations thereunder permitting a personal residence owner to gilt a remainder interest in his residence to his children or other beneficiaries while retaining the right to reside there. The opportunity in using this trust is to eliminate a substantial portion of the value (including future appreciation) from the grantor's gross estate if he outlives the term of the trust. The number of residences available for transfer to QPRTs is limited to 2, which include the full or undivided fractional interest of a principal residence and one other residence. Under this definition, a married couple can have up to 3 residences held in QPRTs using their principal residences and 2 other personal residences.
ISSN:0041-3682