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 Wyoming Personal Residence Trust (PRT) is a legal entity established to protect and preserve the value of a personal residence while minimizing estate taxes. It is a beneficial estate planning tool for individuals who want to maintain control over their primary residence during their lifetime while ensuring its seamless transfer to beneficiaries upon their demise. A PRT in Wyoming operates by transferring ownership of the personal residence to an irrevocable trust, which can be structured in different ways depending on the specific objectives and needs of the granter. Traditional Estate Planning Parts and Qualified Personnel Residence Trusts (Parts) are two common types found in Wyoming. 1. Traditional Estate Planning PRT: This type of PRT allows a Wyoming resident to transfer their primary residence to an irrevocable trust while retaining the right to occupy and use the property for a set period, typically a specific number of years or until death. The primary objective is to remove the residence's value from the granter's estate, reducing potential estate tax liability. Moreover, any appreciation in the property's value during the trust period will also not be subject to estate tax. 2. Qualified Personnel Residence Trust (PRT): Parts provide similar benefits as traditional estate planning Parts but have specific requirements to qualify for additional tax advantages. With a PRT, the granter transfers the residence into the trust for a preset term and continues residing in the property during this period. Once the term ends, the property passes to the designated beneficiaries, reducing the granter's taxable estate by the property's present value at the time of trust creation. Creating a Wyoming Personal Residence Trust offers several advantages and should be considered by anyone wishing to protect their primary residence from excessive estate taxes. The flexibility provided by Wyoming laws and its favorable trust environment make it an attractive jurisdiction for establishing and administering a PRT. However, it is crucial to consult with a qualified estate planning attorney to ensure compliance with relevant laws and to tailor the trust to individual requirements.
