Older Homeowners Gifting Homes To Kids

If you’re thinking about gifting your home to your kids but don’t want to hassle with the gift and estate taxes, using a Qualified Personal Residence Trust (QPRT) may be the way to go.

It doesn’t come without risks and quirks of it’s own, but a QPRT is one way to gift your home to your children, and possibly realize big savings on the associated taxes you might pay if it your home would otherwise stay in your estate.

If you want to pursue a QPRT, call your investment professional. If you have questions about buying or selling a home, please call or email me soon, so that I can learn more about your objectives and help you get there.

Some of the other things I’ve learned about a QPRT include the fact that if you die before the term of trust expires, the home may revert back to your estate, which can nullify any potential estate-tax savings.

You’d likely need to have a reasonably valuable estate already to consider the QPRT approach as useful. You’ll want to keep in mind that the basic federal estate-tax exemption is currently $2 million per person for 2008.

But, if your home is worth a large amount of money, which may be the case if you’ve held it through many of the appreciation cycles we’ve seen over the last few decades, it may be worth looking into a QPRT to avoid having the value of your property jacking up the value of your estate, and pushing the estate into triggering the estate tax.

The top estate-tax rate can be as high as 45%.Talk to your estate planning and tax professional if you think a QPRT may benefit you.

Please call or email me if buying or selling real estate is in your plans for the next year. It pays to start early to develop a strategy for both retirement, and real estate transactions.

-Zachary Epps, full-time professional Realtor® and EcoBroker®

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