Establishing a Qualified Personal Residence Trust (QPRT) involves transferring the residence to a trust that names the persons who are to receive the residence at the end of the stated term, usually a child or children of the donor. The donor is the tr Tennessee Qualified Personnel Residence Trust (PRT) is a legal arrangement designed to minimize estate taxes and protect the value of a personal residence or vacation home in Tennessee. By transferring ownership of the property to the PRT, the granter retains the right to reside in the home for a specified term while potentially reducing estate tax liabilities. The Tennessee PRT functions as an irrevocable trust, meaning that once the property is transferred, it cannot be reclaimed or sold without the consent of the beneficiaries. The granter, who is typically the homeowner, must establish the trust and transfer the property to it, setting forth the terms, such as the duration of their right to reside. One of the primary benefits of a PRT is the potential reduction of estate taxes. By putting the property in the trust, the taxable value of the granter's estate is reduced, minimizing the estate tax burden upon their passing. Additionally, any appreciation in the property's value after the transfer occurs outside the granter's taxable estate. There are generally two types of Tennessee Parts: Granter Retained Interest Trust (GRIT) and Granter Retained Annuity Trust (GREAT). In a GRIT, the granter retains the right to reside in the property for a specified term while paying expenses associated with it. However, in a GREAT, the granter retains the right to receive a fixed annual annuity amount for the trust's term. When the term of a PRT expires, the property is transferred to the named beneficiaries, typically family members or loved ones. It is important to note that if the granter passes away during the PRT term, the property returns to their taxable estate, potentially nullifying the intended tax benefits. Overall, Tennessee Parts offer a valuable estate planning strategy for individuals with significant assets in the form of a personal residence or vacation home. By transferring the property to a trust while retaining the right to reside, granters can potentially minimize estate taxes and protect the value of their beloved property for future generations.
Tennessee Qualified Personnel Residence Trust (PRT) is a legal arrangement designed to minimize estate taxes and protect the value of a personal residence or vacation home in Tennessee. By transferring ownership of the property to the PRT, the granter retains the right to reside in the home for a specified term while potentially reducing estate tax liabilities. The Tennessee PRT functions as an irrevocable trust, meaning that once the property is transferred, it cannot be reclaimed or sold without the consent of the beneficiaries. The granter, who is typically the homeowner, must establish the trust and transfer the property to it, setting forth the terms, such as the duration of their right to reside. One of the primary benefits of a PRT is the potential reduction of estate taxes. By putting the property in the trust, the taxable value of the granter's estate is reduced, minimizing the estate tax burden upon their passing. Additionally, any appreciation in the property's value after the transfer occurs outside the granter's taxable estate. There are generally two types of Tennessee Parts: Granter Retained Interest Trust (GRIT) and Granter Retained Annuity Trust (GREAT). In a GRIT, the granter retains the right to reside in the property for a specified term while paying expenses associated with it. However, in a GREAT, the granter retains the right to receive a fixed annual annuity amount for the trust's term. When the term of a PRT expires, the property is transferred to the named beneficiaries, typically family members or loved ones. It is important to note that if the granter passes away during the PRT term, the property returns to their taxable estate, potentially nullifying the intended tax benefits. Overall, Tennessee Parts offer a valuable estate planning strategy for individuals with significant assets in the form of a personal residence or vacation home. By transferring the property to a trust while retaining the right to reside, granters can potentially minimize estate taxes and protect the value of their beloved property for future generations.
