A qualified personal residence trust (QPRT) is an arrangement where a personal residence is transferred to a trust for a term of years, with the residence passing to beneficiaries at the end of the trust term. A QPRT allows you to make a gift of your current remainder interest in a residence, but continue to occupy the home for a number of years in the future. The residence will revert to your estate if you die during the trust term. Second homes (e.g., vacation homes) are especially good candidates for transfers to a QPRT.
Because you retain a term (and reversionary) interest in the trust, the value of the interest transferred to beneficiaries is reduced—which can result in significant tax savings. Another benefit is that all future appreciation is transferred to beneficiaries without being subject to gift or estate tax.
Upon expiration of the term, you can continue to occupy the residence, provided fair market rent is paid. The payment of rent to beneficiaries further reduces your estate value.
Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC.
Infinex and First Commonwealth Bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.
*We do not provide tax advice. Consult your tax advisor.
*Diversification is a method of controlling risk. It does not assure a profit or the avoidance of loss.
**Dollar-cost averaging is a method of controlling risk. It does not assure a profit or the avoidance of loss. Investors should consider their ability to continue a dollar-cost averaging program in periods of declining markets.