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.
A Louisiana Personal Residence Trust (PRT) is a legal tool used to protect and transfer ownership of a primary residence or vacation home to the next generation while minimizing estate taxes. It allows an individual to retain the right to live in the property for a specified period, after which it passes to the beneficiaries. In a Louisiana PRT, the granter (the owner of the property) creates a trust and transfers the residence into it. The granter can live in the property for a predetermined period, typically set at least ten years, and maintain control over its management and use during this time. Once the trust term ends, the property is automatically transferred to the beneficiaries, which are typically the granter's children or other designated individuals. One of the key benefits of a Louisiana PRT is the reduction in estate taxes. Since the property is no longer considered part of the granter's estate, it avoids inclusion in the taxable estate upon their death, thus potentially reducing the estate tax liability for their heirs. There are a few different types of Louisiana Personal Residence Trusts: 1. Contractor Personal Residence Trust (NG PRT): In an NG PRT, the granter does not retain the right to live in the property during the trust term. Instead, they transfer ownership to the trust and must pay fair market rent to occupy the residence. This type of trust further reduces the granter's estate for estate tax purposes. 2. Granter Personal Residence Trust (GPRS): A GPRS is the most common form of personal residence trust. In this type, the granter retains the right to live in the property for a specific period, after which the property passes to the beneficiaries. The granter must pay fair market rent for their use of the property, but the rent payments are not deductible. 3. Qualified Personnel Residence Trust (PRT): A PRT is a type of GPRS that has additional requirements to qualify for certain tax benefits. The granter can transfer their primary residence or vacation home to the trust and retain the right to live in it for a fixed period. At the end of the term, the property moves to the beneficiaries, but if the granter dies within the trust term, the property returns to their estate for estate tax purposes. In summary, a Louisiana Personal Residence Trust is a legal instrument that allows individuals to transfer ownership of a primary residence or vacation home to their beneficiaries while minimizing estate taxes. Different types of Parts include Contractor Personal Residence Trusts, Granter Personal Residence Trusts, and Qualified Personnel Residence Trusts.A Louisiana Personal Residence Trust (PRT) is a legal tool used to protect and transfer ownership of a primary residence or vacation home to the next generation while minimizing estate taxes. It allows an individual to retain the right to live in the property for a specified period, after which it passes to the beneficiaries. In a Louisiana PRT, the granter (the owner of the property) creates a trust and transfers the residence into it. The granter can live in the property for a predetermined period, typically set at least ten years, and maintain control over its management and use during this time. Once the trust term ends, the property is automatically transferred to the beneficiaries, which are typically the granter's children or other designated individuals. One of the key benefits of a Louisiana PRT is the reduction in estate taxes. Since the property is no longer considered part of the granter's estate, it avoids inclusion in the taxable estate upon their death, thus potentially reducing the estate tax liability for their heirs. There are a few different types of Louisiana Personal Residence Trusts: 1. Contractor Personal Residence Trust (NG PRT): In an NG PRT, the granter does not retain the right to live in the property during the trust term. Instead, they transfer ownership to the trust and must pay fair market rent to occupy the residence. This type of trust further reduces the granter's estate for estate tax purposes. 2. Granter Personal Residence Trust (GPRS): A GPRS is the most common form of personal residence trust. In this type, the granter retains the right to live in the property for a specific period, after which the property passes to the beneficiaries. The granter must pay fair market rent for their use of the property, but the rent payments are not deductible. 3. Qualified Personnel Residence Trust (PRT): A PRT is a type of GPRS that has additional requirements to qualify for certain tax benefits. The granter can transfer their primary residence or vacation home to the trust and retain the right to live in it for a fixed period. At the end of the term, the property moves to the beneficiaries, but if the granter dies within the trust term, the property returns to their estate for estate tax purposes. In summary, a Louisiana Personal Residence Trust is a legal instrument that allows individuals to transfer ownership of a primary residence or vacation home to their beneficiaries while minimizing estate taxes. Different types of Parts include Contractor Personal Residence Trusts, Granter Personal Residence Trusts, and Qualified Personnel Residence Trusts.
