QPRT: How Can a Home Be Transferred While the Owner Keeps Living There?
A QPRT splits current use of a residence from a future remainder interest.
Structure
The grantor transfers a qualifying residence to the trust but retains the right to use it for a specified term.
Gift value
Because the grantor retains a term interest, the taxable value of the remainder gift can be lower than the home's full current value under applicable valuation rules.
Mortality risk
If the grantor dies during the retained term, estate-inclusion consequences can undermine the intended transfer-tax benefit.
After the term
If the grantor continues living in the residence after the retained term, appropriate rent and other planning issues can arise.
The takeaway
The grantor retains the right to use the residence for a stated term, while the discounted remainder interest is transferred to beneficiaries subject to strict rules and mortality risk.
Related Summit guides
FAQ
Does the grantor immediately lose the right to live in the home?
No.
Can death during the retained term affect estate inclusion?
Yes.
Is QPRT planning governed by detailed statutory rules?
Yes.