Posted on June 19, 2011

The Qualified Personal Residence Trust (QPRT) is an important and valuable estate tax planning technique for efficiently transfering the value of your primary residence or vacation home to your children on a tax advantaged basis.

The QPRT is an Irrevocable Trust which takes advantage of certain provisions in the tax code to allow you to leverage your gift of your home using a discounted value. Because it take advantage of provisions in the Treasury Regulations, it is a safe and secure way to accomplish your goal without any legal or tax risks.

To create a QPRT, the homeowner transfers his or her residence to a trust for a set period of time (4, 7, 11 or 15 years). You pick any number of years for the term. You continue to reside or use the home as you see fit during this time.

At the end of the term, the property is transfered to the beneficiaries you have named in the trust (usually your children).