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Qualified Personal Residence Trusts

November 16, 2023

Qualified Personal Residence Trust, or QPRT, is a popular estate planning strategy that allows individuals to transfer their home or vacation property to their heirs with minimal tax liability.

Today, we will explore some of the benefits of a Qualified Personal Residence Trust and why it's gaining popularity.

Benefit 1: Transfer Property at a Reduced Tax Basis

First, a QPRT enables you to transfer your property at a reduced tax basis. By placing your property in the trust and retaining the right to live in it for a specific period before transferring it to beneficiaries, the taxable value of the transfer decreases, resulting in a lower tax liability.

Benefit 2: Reduced Gift and Estate Taxes

Second, a QPRT can help reduce gift and estate taxes. Since the property is transferred to the trust, it's no longer part of your estate, reducing the estate tax liability. Additionally, the transfer of the property is considered a gift, but retaining the right to occupy the property lowers the taxable value, leading to a lower gift tax liability.

Benefit 3: Protection from Creditors

Third, a QPRT provides protection from creditors. Once the assets are transferred to the trust, they are shielded from your creditors, safeguarding your property in the event of lawsuits or financial hardships.

Benefit 4: Retain Use and Enjoyment of Property

Lastly, with a QPRT, you can retain the use and enjoyment of your property during the trust term. You can continue to occupy and use the property for a fixed period while ensuring it passes on to your heirs, benefiting both you and your beneficiaries.

Securing your financial future and protecting your loved ones' interests starts with proper planning. To learn if a Qualified Personal Residence Trusts can benefit your estate planning, please use the link below to schedule your meeting!

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Note: Investment strategies and specific investments mentioned may not be suitable for everyone. Individual decisions should be made after careful consideration of one's financial objectives, situation, and needs. This information is not intended as a personalized recommendation. Seeking advice from a personal investment advisor is recommended.

Please note that representatives do not offer tax or legal advice. Discussions related to taxes are purely informational, not exhaustive, and should not be interpreted as legal, tax, or accounting advice. It is advisable for clients to consult with qualified legal, tax, and accounting advisors as needed.

Securities and investment advisory services are provided through registered representatives of MML Investors Services, LLC, a member of SIPC.