Tampa Personal Residence Trust Attorney
A key consideration when making a Florida estate plan is how to address the transfer of your primary residence. One option is to create a qualified personal residence trust (QPRT). This is a type of irrevocable trust that effectively removes your home from your taxable estate, while still allowing you to continue living on the property for a specified period of time.
A QPRT is a fairly complex trust that requires careful planning. Our Tampa personal residence trust attorney can review your current financial and real estate situation and advise you on whether a QPRT might be beneficial for you and your family. Knudsen Law is a full-service Florida estate and probate firm that assists clients in creating and managing a wide range of estate planning trusts.
How Does a Florida Qualified Personal Residence Trust Work?
A trust is a legal arrangement where the owner of property, known as the grantor, transfers legal title to a trustee. In a revocable trust, the grantor retains the right to abolish the trust and take the property back. Indeed, with many revocable trusts, the grantor also serves as the trustee.
A qualified personal residence trust works a bit differently. For one thing, a QPRT is irrevocable. The grantor transfers their home to the trustee and cannot take it back later. Because the QPRT is irrevocable, however, the primary residence is no longer considered a part of the grantor’s estate when it comes to determining federal gift or estate tax liability.
At the same time, the grantor and their family may continue to live in the residence for a period of time specified in the trust. During this period, the grantor must still pay for any upkeep and maintenance on the property. The grantor may also continue to take advantage of any tax benefits applicable to their primary residence, such as Florida’s homestead exemption.
There is, of course, a catch. Once the term of the QPRT expires, ownership of the residence passes to the beneficiaries named in the trust, who cannot be the same person as the grantor. For instance, if you create a QPRT, you could name your children as the beneficiaries. They would take ownership of your home when the trust term expires. If you still wish to live in the home at that point, you would then pay rent for your children. This allows you to indirectly pass additional wealth to your children or other beneficiaries.
It is important to note, however, that if you create a QPRT and do not outlive the term of the trust, ownership of the property reverts to your estate, where it may be subject to federal gift and estate tax.
Let Our Tampa Personal Residence Trust Attorneys Assist You
A properly structured qualified personal residence trust can help you create a financial legacy for your children or other beneficiaries while enabling you to remain in your home until you are ready to leave. Our Tampa personal residence trusts lawyer can provide you with further guidance and legal advice on this subject. Contact Knudsen Law today at (727) 398-3600 to schedule a consultation.