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Qualified Personal Residence Trust (QPRT)

What is it?

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 your beneficiaries at a deeply discounted gift tax value. You can continue living there by paying fair market rent to the trust.

Why is it important?

A QPRT can transfer a valuable home out of your estate at a fraction of its actual value for gift tax purposes. The longer the retained term, the bigger the discount—a 10-year QPRT on a $1 million home might have a gift tax value of only $300,000-$400,000. The home's future appreciation is also excluded from your estate. Ideal for homeowners planning to age in place.

Example Language

The Grantor transfers their $1,200,000 primary residence to a 10-year QPRT. The Grantor continues living in the home for the full 10-year term. The gift tax value is calculated at approximately $420,000 (using current IRS rates), saving roughly $780,000 in gift/estate tax value. After 10 years, the home passes to the children's trust, and the Grantor pays fair market rent to continue residing there.