Qualified Personal Residence Trusts

 

A qualified personal residence trust, abbreviated as "QPRT" and pronounced by practitioners as a "cue-pert," is a great tool for removing a home from one's gross estate.  After all, a home is usually one's most valuable asset.  A QPRT is an advanced estate planning technique, and it should only be used for those with gross estates that may be subject to the federal estate tax.

For 2017, the Internal Revenue Service has set the federal estate and gift tax exemption at $5.49 million per individual.  Essentially, this means that an individual can leave $5.49 million to heirs and pay no federal estate or gift tax.  A married couple is then able to shield $10.98 million from federal estate and gift taxes.  Those with estates greater than this amount will find themselves subject to the 40% federal estate tax.  Therefore, planning to minimize their gross estate is essential.

Those who utilize a QPRT transfer their home into the trust, which keeps it out of their gross estate when they pass away.  In the meantime, they are able to continue living in the home.  At the end of a specified period, the property can pass to others, avoiding probate.

There are companies out there that offer quick, cheap trusts.  They market to people who are looking for a deal, and they provide terrible products that have not been drafted by attorneys licensed within their customers' jurisdictions.  As you can guess from above, most people don't even need trusts as a part of their estate plans.  At Barber Power Law Group, our experienced estate planning attorneys create a unique estate plan for every single client that comes through our door.  We draft each estate planning document, including trusts, by hand to ensure that our clients' objectives are accomplished.  We seek to maximize our clients' legacy while minimizing taxes on their estates.

Call us today at (980) 202-5679 to schedule a free consultation, and subscribe to our North Carolina Estate Planning Newsletter below for free updates on North Carolina Estate Planning laws.