Depressed real-estate values and changes in tax rules make this a good time for older homeowners to transfer property to their children using a specialized trust designed to save on gift and estate taxes.
Known as “qualified personal residence trusts,” or QPRTs, these vehicles allow a homeowner to continue to live in a house for years before transferring ownership to heirs at a discount to the current market value.
Wealth advisers say QPRTs are getting more popular as clients seek to take advantage of beaten-down property values and a temporary increase in the gift-tax exemption to $5 million from $1 million for individuals and to $10 million from $2 million for couples.