Personal residence trusts are used to transfer a grantors residence out of the grantors estate at a low gift tax value. Once the trust is funded with the grantors residence, the residence and any future appreciation of the residence is excluded from grantors estate. This type of trust is an irrevocable split interest trusts. The transfer of the residence to the trust constitutes a completed gift. The split interest character of the trust is as follows: the grantor retains the right to live in the house for a number of years, rent free, and then the remainder beneficiaries of the trust become fully vested in their interest.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
Delaware Personal Residence Trust (DIRT) is a legal entity commonly used to facilitate the transfer of ownership and control of a personal residence into a trust. This estate planning tool helps individuals protect the value of their primary residence and minimize estate taxes while still allowing them to reside in the property during their lifetime. The primary goal of a Delaware Personal Residence Trust is to remove the value of the residence from the individual's taxable estate, ultimately reducing the estate tax burden on their heirs. By transferring the ownership of their home into the DIRT, individuals can take advantage of specific tax benefits and still maintain control over the property as the granter. However, the granter must relinquish their right to occupy the property for a predetermined period, typically for a term of years. There are two main types of Delaware Personal Residence Trusts: 1. Delaware Self-Settled Personal Residence Trust (DS PRT): Under this type of DIRT, the granter retains the right to reside in the property for a set term, after which the granter must vacate the residence. The DS PRT allows the granter to remove the value of the residence from their taxable estate, thereby reducing estate taxes upon their passing. The granter can also choose to lease the property back from the trust once the trust term ends. 2. Delaware Non-Self-Settled Personal Residence Trust (DNS PRT): Unlike the DS PRT, the DNS PRT does not allow the granter to continue residing in the property after the trust term ends. Instead, the granter typically reserves the right to use the property for a specified number of days each year. This trust type still offers the benefit of reducing estate taxes, but the granter must find alternative housing arrangements once the trust term expires. Both Sports and Deserts offer unique advantages and disadvantages, so it is crucial for individuals considering a Delaware Personal Residence Trust to consult with a qualified attorney or estate planner to determine which trust structure best suits their needs. In conclusion, a Delaware Personal Residence Trust is a powerful estate planning tool that allows individuals to protect their personal residences, reduce estate taxes, and retain control over the property during their lifetime. By leveraging the various types of Darts available, individuals can tailor their trust arrangements to their specific circumstances and objectives.Delaware Personal Residence Trust (DIRT) is a legal entity commonly used to facilitate the transfer of ownership and control of a personal residence into a trust. This estate planning tool helps individuals protect the value of their primary residence and minimize estate taxes while still allowing them to reside in the property during their lifetime. The primary goal of a Delaware Personal Residence Trust is to remove the value of the residence from the individual's taxable estate, ultimately reducing the estate tax burden on their heirs. By transferring the ownership of their home into the DIRT, individuals can take advantage of specific tax benefits and still maintain control over the property as the granter. However, the granter must relinquish their right to occupy the property for a predetermined period, typically for a term of years. There are two main types of Delaware Personal Residence Trusts: 1. Delaware Self-Settled Personal Residence Trust (DS PRT): Under this type of DIRT, the granter retains the right to reside in the property for a set term, after which the granter must vacate the residence. The DS PRT allows the granter to remove the value of the residence from their taxable estate, thereby reducing estate taxes upon their passing. The granter can also choose to lease the property back from the trust once the trust term ends. 2. Delaware Non-Self-Settled Personal Residence Trust (DNS PRT): Unlike the DS PRT, the DNS PRT does not allow the granter to continue residing in the property after the trust term ends. Instead, the granter typically reserves the right to use the property for a specified number of days each year. This trust type still offers the benefit of reducing estate taxes, but the granter must find alternative housing arrangements once the trust term expires. Both Sports and Deserts offer unique advantages and disadvantages, so it is crucial for individuals considering a Delaware Personal Residence Trust to consult with a qualified attorney or estate planner to determine which trust structure best suits their needs. In conclusion, a Delaware Personal Residence Trust is a powerful estate planning tool that allows individuals to protect their personal residences, reduce estate taxes, and retain control over the property during their lifetime. By leveraging the various types of Darts available, individuals can tailor their trust arrangements to their specific circumstances and objectives.
