Qualified Personal Residence Trust
A qualified personal residence trust (QPRT) is a form of a grantor retained trust. As is evident by its name, the asset placed in the trust is the personal residence of the Trustmaker.
One of the major differences of the QPRT is that the discounted value of the house is used in determining the gift given to the beneficiaries.
During the term of the QPRT, the Trustmaker or spouse or dependent must live in the residence. The residence can be sold, but must be replaced within two years.
One of the major advantages of a QPRT, as with any other Grantor Retained Trust, is that the post-gift appreciation in value of the residence passes to the beneficiary free of any estate or income tax.