From The Wall Street Journal Online (March 19, 2011) “A Matter of Trust: Giving Away a Home”
AN article introducing and discussing the possibilities of QPRTs or “qualified personal residence trusts” as vehicles for transferring ownership of residential houses. The article discusses the growing popularity of QPRTs as estate planning vehicles that can take advantage of low market prices on houses to maximize value against gift tax exclusions, and mentions some complications that might arise.
At the end of the initial term, your children (or other intended beneficiaries) would become the trust beneficiaries and your interest in the trust (including its primary asset, the personal residence) would then end. You, however, could still be the trustee and, under the terms of the trust, would be allowed to rent the house from the trust for a fair market rent. This rent could be used to pay the expenses of maintaining the house. If the house were later sold, the proceeds would be paid to your children as beneficiaries of the trust.
Holden Campbell, LLC Annapolis Estate Planning Attorneys