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Financial Answer Center


Qualified Personal Residence Trust

A qualified personal residence trust (QPRT) is an arrangement where a personal residence is transferred to a trust for a term of years, with the residence passing to beneficiaries at the end of the trust term. A QPRT allows you to make a gift of your current remainder interest in a residence, but continue to occupy the home for a number of years in the future. The residence will revert to your estate if you die during the trust term. Second homes (e.g., vacation homes) are especially good candidates for transfers to a QPRT.

Because you retain a term (and reversionary) interest in the trust, the value of the interest transferred to beneficiaries is reduced—which can result in significant tax savings. Another benefit is that all future appreciation is transferred to beneficiaries without being subject to gift or estate tax.

Upon expiration of the term, you can continue to occupy the residence, provided fair market rent is paid. The payment of rent to beneficiaries further reduces your estate value.

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Securities and insurance products are offered through Osaic Institutions, INC., Member FINRA/SIPC. Osaic Institutions, INC. and FB Wealth Management, a division of First Bank, are not affiliated. We do not provide tax advice. Consult your tax advisor. NOT Bank Deposits NOT FDIC-Insured HAVE NO Bank Guarantee NOT Insured by any Federal Government Agency May Go Down in Value