Liquidity, Powers of Appointment, and Trusts - Qualified Personal Residence Trusts

Qualified Personal Residence Trusts
A qualified personal residence trust (QPRT or House-GRITs) is used by a grantor to transfer their personal residence to a trust with the right to retain the use of the home for a specified number of years. At the termination of the trust, one or more remainder beneficiaries receive the personal residence.


Look out!
It is advisable for the grantor to select a retained-interest term that would likely be survivable. If the grantor dies before the term of the QPRT expires, then the entire value of the trust property (not just the retained interest) is included in the gross estate of the decedent. If the grantor survives the term period of the trust, then none of the property will be included in the grantor\'s estate.
The longer the term of the grantor\'s retained interest in the QPRT, the lower the value of the gift to the remaining beneficiaries.

Valuation of Qualified Interests

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