Overview
A QPRT transfers your primary home or vacation home to an irrevocable trust while you retain the right to live in it for a set number of years. At the end of the term, the home passes to beneficiaries at a deeply discounted gift tax value. You can continue living there by paying fair market rent.
Best For
- Homeowners with valuable primary residences
- Those wanting to transfer a vacation home to children
- People planning to age in place
- High net worth individuals reducing estate size
Key Features
- ✓ Transfer home at a fraction of gift tax value
- ✓ Continue living in home during trust term
- ✓ Future appreciation excluded from estate
- ✓ Can pay rent to remain after term expires
- ✓ Longer terms create bigger tax discounts
- ✓ Can hold primary home or one vacation home
📊 Tax Benefits
- ✓ Gift tax value deeply discounted (often 50-70% off)
- ✓ All future home appreciation excluded from estate
- ✓ Rent payments further reduce grantor's estate
- ✓ Step-up in basis may be available with proper planning
- ✓ Can save hundreds of thousands in estate tax
Considerations
- Grantor must survive the trust term
- If grantor dies during term, home returns to estate
- Must pay fair market rent after term expires
- Cannot sell home without trustee cooperation
- Loss of step-up in basis for beneficiaries
- Only works for personal residences (primary or vacation)