Ada-Icon
Required

What You Can Do With a QPRT, Elder Law Attorney, Woodstock, GA


Qualified personal residence trusts are not as popular of an estate planning tool as they used to be but in some circumstances they can still be used beneficially.

Due to relatively high estate tax exemptions and relatively low interest rates, qualified personal residence trusts have dropped out of favor in estate planning. They just are not as useful for as many people as they used to be.

However, people who expect to have estates with values over the estate tax exemption or who have homes that could rapidly rise in value can still benefit from a QPRT as long as everyone in the family is on the same page about what should happen to the home.

Recently, Barron’s discussed some of the benefits and drawbacks of QPRTs in “Holding Vacation Homes in Trust.”

A QPRT is an irrevocable term-limited trust that can help to stretch your gift tax exemption. When a residence is put into the trust the value of the residence is locked in for tax purposes.

The owner can still live in the home and is responsible for it. The residence can even be sold as long as another residence is then put in the trust.

When the term of the trust ends the trust beneficiaries become the new owners of the residence. However, if the current owner passes away before the term of the trust is over, the purpose of the trust is defeated and the home becomes part of the estate.

Major drawbacks of a QPRT?

Once the trust is ended the current owners can only continue to live in the home if they pay fair market rent and the trust beneficiaries who are the new owners are responsible for upkeep. Thus, if the beneficiaries are not financially independent and able to pay for upkeep, a QPRT is normally not a good option.

If the beneficiaries wish to sell the residence, they might have to pay more in taxes than if they had inherited the home through other means.

Consequently, a QPRT is only a good idea when the beneficiaries would like to keep the home.

Reference: Barron’s (Nov. 4, 2016) “Holding Vacation Homes in Trust.”

 

Hear From Our Clients
tes-prev
tes-next

“On the threshold of retirement, we finally decided to quit thinking we could self-prepare the requisite documents. We had previously had only a very simple will. We needed the necessary legal (including updated will) & health care docs but didn’t want to deal with the time & complication of legalese. Cindy made the process relatively painless. She took the time to explain and answer questions without trying to upsell services. We were done in 2 meetings plus the reading of emailed drafts. In addition to preparing the documents, Nelson Eldercare will be there when our adult children need advice on executing the plans we’ve put in place.So glad it’s behind us and would recommend Cindy and her helpful staff.”

- Bonnie

Cindy and her company treat their clients like family. Nelson’s offers clear, direct, and honest guidance in planning for your families security and future. No one wants to actively sit down and make these decisions, but Nelson’s makes this process seamless. I was so impressed with their willingness to answer all questions big or small. So glad I made the decision have them help my mom and dad and now me. You can’t go wrong with Nelson’s Elder Care Law.

- Hope

The very best elder law attorney and staff anyone could ever ask for! I have referred a number of clients to Cindy and she never disappoints. She is kind, caring, and extremely thorough in making sure everything is completed as it should be. I highly recommend Cindy for anyone needing lawyer services; she truly goes above and beyond for every client she helps and has had a huge impact in so many peoples’ lives. Thank you, Cindy and staff, for everything that you do- I’m so glad to know you!

- Kerri

I heard Cindy’s presentation at a Senior Luncheon at my church, and was very impressed. She helped my daughter and me understand many aspects of elder law. Josh has also been very helpful in my planning to enter an independent living situation . I have told many friends about them.

- Charlotte

Cindy and the Nelson Elder Care Law team are trustworthy and helpful. They are the experts in elder care law. At Leaf Cremation, we entrust our families to the care of the Nelson team when their services are needed.

- Pierce