Brown & Streza Blog
Author: David A. Brown Created: 1/12/2012 2:44 PM
David Brown blog
By David Brown on 3/7/2012 4:07 PM
When an estate is in excess of the Unified Credit, gifting assets is a good way to avoid future estate taxes.

A Qualified Personal Residence Trust (QPRT) is one of the best tools to use because it is so simple.

While we still have a $5,000,000 exemption we should all be encouraging our clients to make gifts this year, assuming it is a taxable estate.

Here are a few of the characteristics of a QPRT:

1. Transfer the home or homes (a couple is allowed to transfer up to 4) at a significant DISCOUNT. 2. The gift FREEZES the value at the discounted gift value, so if the home appreciates by the time the client dies all of the appreciation is out of the estate. 3. While the client is living they still live in the home just like they always did. 4. If they are married there is no “rent” due at the end of the “term” unless they want to pay rent. Some couples like the idea of paying rent to the kids after the term as a further means to help the kids and reduce the estate tax. Many...