Your home may be your most valuable personal asset, and as a result you may be very interested in protecting it from any legal actions that may be lodged against you in the future. People who are in certain lines of work are naturally vulnerable to lawsuits, and for these individuals (and others) a qualified personal residence trust may be a good option.
Once you place the property into the trust it is protected because it is technically no longer your personal property and it is not going to be part of your estate so there are positive estate tax implications here. You need not concern yourself about being displaced because you may continue to live in the home for as long as you would like to rent free.
While you are doing so you are retaining interest in the home. Funding the trust with the property is considered to be a taxable gift, but the taxable value of this gift is going to be reduced by the amount of this retained interest. In the end its taxable value will be far less than its actual fair market value and this is a big part of the appeal of QPRTs from a tax efficiency perspective.
These vehicles can be a good choice for many people for both asset protection and tax savings. To learn more about this strategy and other things that can be done to preserve your wealth for future generations take action right now to set up an informative consultation with a seasoned, savvy Indianapolis estate planning lawyer.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.