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:
“Take two kids in competition for their parents’ love and attention. Add to that the envy that one child feels for the accomplishments of the other; the resentment that each child feels for the privileges of the other; the personal frustrations that they don’t dare let out on anyone else but a brother or sister, and it’s not hard to understand why in families across the land, the sibling relationship contains enough emotional dynamite to set off rounds of daily explosions.”
—Adele Faber (20th century)
“If you would feel the full force of a tempest, take up your residence on the top of Mount Washington, or at the Highland Light, in Truro.”
—Henry David Thoreau (1817–1862)
“In society, in the best institutions of men, it is easy to detect a certain precocity. When we should still be growing children, we are already little men. Give me a culture which imports much muck from the meadows, and deepens the soil,—not that which trusts to heating manures, and improved implements, and modes of culture only!”
—Henry David Thoreau (1817–1862)