Qualified Personal Residence Trust (qprt)
Definition of "Qualified personal residence trust (qprt)"
Trust instrument that permits the owner of a residence (grantor) to transfer ownership of that residence with the grantor still being allowed to stay in that residence for a stipulated period of time on a tax advantage basis. The procedure in establishing such a trust would be for: the grantor to establish an irrevocable trust that would allow the grantor to stay in that residence for a given period of time (for example 15, 20, or 30 years); and the grantor to contribute the residence to the trust. At the end of that given time period, the residence will then be transferred to the beneficiary (s) of the trust as selected by the grantor at the inception of the trust. The tax rules value the residence that transfers to the beneficiary (s) of the trust at a substantial discount from the actual value of the residence on the date the grantor contributed it to the trust. The disadvantages of the QPRT include the following: at the end of the given period of time, the grantor can no longer stay in the residence and the beneficiary (s) own the residence outright; and if the grantor dies before the expiration of the QPRT, the residence's actual value on the day it was contributed to the trust is included in the grantor's estate and thus becomes subject to FEDERAL ESTATE TAX. For example, a father retains, for a given time period, the right to use and possess the home. At the end of that time, the home's ownership reverts to the children but the father can continue to live in the home. If the father dies during the given time period, the home is taxed at full value as part of the father's estate. The life insurance policy previously purchased with the children as the beneficiary will override the lost estate tax savings because of the death of the father within that term period.
Popular Insurance Terms
Cost per unit of insurance. ...
Waiver of an impairment of an applicant for health insurance by attaching an endorsement to the health insurance policy stating that the policy will pay no benefits in connection with the ...
Provision that the equity of an insured in a life insurance policy cannot be forfeited. There are four benefits a policyholder can select under the option: cash surrender value, extended ...
Same as term Buy-Back Deductible: deductible eliminated through the payment of an additional premium, resulting in first-dollar coverage under the policy. ...
Special policy blank issued by an insured for individual shipments or other purposes under an open policy. The open policy allows an insured to buy protection for all marine business for an ...
services provided in an employee benefit plan such as a pension plan. An employer provides the clerical staff to operate the plan, in effect acting as custodian. The trustee provides ...
Insurance for private pleasure boats. Coverage is not standard, but is generally broken down into insurance for yachts, including sailboats; boats with inboard motors under marine ...
Case where an insurance company is placed by the state court under the control of the state insurance department. Claims are paid in the order filed until the insurance company's ability to ...
Coverage for an insured manufacturer for claims after a manufactured product has been sold and/or a claim results from an operation which the manufacturer has completed. ...
Have a question or comment?
We're here to help.