In order to implement a Qualified Personal Residence Trust, the client/grantor creates a trust and makes a gift of a residence or second home to the trust. However, the grantor retains the right to live in the residence for the trust term. At the end of the trust term, the residence goes to the trust beneficiaries – the heirs. The longer the term, the lower the value for gift taxes. However, if the grantor dies before the end of the term, the value of the residence is still included as part of the grantor’s estate for estate tax purposes.

 

 

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