A Qualified Personal Residence Trust, or "QPRT," can generally be thought of as a gift of a personal residence of the grantor that does not take effect until the end of a period of years. The QPRT is a close cousin to the Grantor Retained Annuity Trust. Both trusts are taxed similarly and provide the grantor with the benefit of transferring the appreciation of the assets placed in trust to the trust's beneficiaries at a reduced transfer tax rate. However, only a qualified personal residence may be placed in a QPRT, whereas virtually any asset can be placed in a GRAT.

QPRTs are extremely popular estate planning vehicles because they permit senior family members to retain the use of their home for a number of years and then transfer the home to future generations at a reduced transfer tax cost. At the end of the term of years, the QPRT can either distribute the residence to the remainder beneficiaries or retain the residence in trust for their benefit. The grantor may even be permitted to lease the residence from the QPRT in the event he or she desires to continue to live there. As with all sophisticated estate planning techniques, however, the appropriateness of using a QPRT for a particular estate plan will hinge upon the unique goals, circumstances and aspects of a particular client. At B&M, we strive to understand each client's unique vision and provide sound planning options to achieve each client's goals.