This was the subject of a recent Fox Business article titled “Shielding Your Assets From Estate Taxes.”
The problem with planning for the family homestead is a very practical one in Overland Park and elsewhere. Likely, you are living there and would like to continue doing so for as long as you can. On the other hand, you do not want to subject your home to probate or estate taxation.
Properly structured, a QPRT can allow you to live in your home while simultaneously giving it away by holding it in the trust. While there are more than a few tax advantages to this, this ability to preserve the home and transfer it is always key.
Any decision to QPRT or not to QPRT will depend on many factors, to include your state law and estate tax exposure. For the vast majority of taxpayers, a QPRT will be o-v-e-r-k-i-l-l. Disclosure: As my clients can tell you, my philosophy is to "use the least amount of 'legal medicine' required to protect everyone you love and everything you have" from the exposures that most concern you.
All that noted, the favorable interest rates and political winds may be about to shift on QPRTs and GRATs alike. Consequently, if (and only if) a QPRT or GRAT is appropriate for your unique circumstance, do not procrastinate or the window of opportunity may close.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.For more information about estate planning and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Fox Business (July
29, 2013) “Shielding Your Assets From Estate Taxes”