QPRT

Question 1

Describe a QPRT

Answer 1

Irrevocable trust in which the grand tour transfers his/her personal residence

Question 2

After a person transfers their personal residence into a residence trust, do they have the ability to live in the property?

What happens after the term is up?

Answer 2

Yes

Passes to beneficiaries, grantor has to pay market rent

Question 3

How many residents can be in a QPRT and what does it exclude?

Answer 3

Two residences

Cannot have rental property

Question 4

When would it be best to use a QPRT?

Answer 4

Value of property is at least $2 million or more

Person has a reasonable life expectancy

Large estate

Question 5

What happens if the owner passes away before the QPRT term is complete?

Answer 5

Just like a GRAT/GRUT, the FMV date of death value is included in the donors estate

Question 6

If a person has two residents in a QPRT, does one of them have to be the primary residence?

Answer 6

Yes

Question 7

Why would somebody want to take advantage of a QPRT?

Answer 7

If they have a large estate, they can place their residence in this trust, and if they outlive the term, the residence would pass estate tax-free.