Our homes are often one of our most valuable assets and one of the largest components of our taxable estate.  A Qualified Personal Residence Trust or a QPRT allows you to give away your house or vacation home at a great discount, freeze its value for estate tax purposes, and still continue to live in it. 

How does a QPRT work:

First you transfer the title to your house to the QPRT (usually for the benefit of your family members). With the transfer you reserve the right to live in the house for a specified number of years. If you live to the end of the specified period, the house (as well as any appreciation in its value since the transfer) passes to your children or other beneficiaries free of any additional estate or gift taxes.  You must also pay rent to the designated beneficiary if you want to continue to live in the home.  This will avoid inclusion of the home's value in your estate.  The additional rent you pay is an increased benefit becaue it further reduces the value of your taxable estate.

If you die before the end of the QPRT period the value of the house is included in your taxable estate.  Another benefit of the QPRT is that the QPRT also serves as an excellent asset/creditor protection vehicle since you no longer technically own the property once the trust is established and your residence is transferred to the QPRT.  Although Florida homesteads have protection from creditors, second homes or vacation properties are not protected under the Florida Constitution.

If you would like more information on Qualified Personal Residence Trust or to create a Qualified Personal Residence Trust in Jacksonville or other areas of Florida, CONTACT our Florida Trust Lawyers by email or call us at 904-685-1200 to discuss your situation today.