Personal Residence Trusts
To escape valuation under Code section 2702 (i.e., retained interest valued at zero), a PRT must comply with the following two primary requirements: (i) the trust may hold only one residence which must be used as the grantor’s personal residence during the term of the trust; and (ii) the trust may not allow the sale of the residence during the term of the trust. Additionally, following the expiration of the residence term, sale to grantor or grantor’s spouse is also prohibited.
The inability to sell the residence is a major restriction on the flexibility of a PRT and usually makes QPRTs more desirable. PRTs do not, however, have many other technical restrictions that QPRTs are subject to.
Read more about this topic: Qualified Personal Residence Trust
Famous quotes containing the words personal, residence and/or trusts:
“Your children don’t have equal talents now and they won’t have equal opportunities later in life. You may be able to divide resources equally in childhood, but your best efforts won’t succeed in shielding them from personal or physical crises. . . . Your heart will be broken a thousand times if you really expect to equalize your children’s happiness by striving to love them equally.”
—Marianne E. Neifert (20th century)
“The death of William Tecumseh Sherman, which took place to-day at his residence in the city of New York at 1 o’clock and 50 minutes p.m., is an event that will bring sorrow to the heart of every patriotic citizen. No living American was so loved and venerated as he.”
—Benjamin Harrison (1833–1901)
“He that trusts to you,
Where he should find you lions, finds you hares;
Where foxes, geese.”
—William Shakespeare (1564–1616)