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.
Allegheny Pennsylvania Personal Residence Trust (AP PRT) is a legal arrangement commonly used in estate planning that allows individuals or families to transfer ownership of their personal residence to a trust, providing various benefits and protections. This type of trust is governed by specific laws and regulations in Allegheny County, Pennsylvania. By utilizing an Allegheny Pennsylvania Personal Residence Trust, individuals can effectively remove the value of their primary residence from their taxable estate, reducing potential estate taxes. This allows the granter (the person creating the trust) to retain control and use of their home during their lifetime, while also ensuring its seamless transfer to the intended beneficiaries upon their passing. AP PRT can be tailored to meet specific needs and goals, offering different types and features: 1. Revocable Allegheny Pennsylvania Personal Residence Trust: This type of trust allows the granter to retain the ability to modify, revoke, or amend the trust terms during their lifetime. It provides flexibility while still offering estate tax benefits. 2. Irrevocable Allegheny Pennsylvania Personal Residence Trust: Unlike the revocable trust, an irrevocable AP PRT can't be altered or revoked by the granter once it has been established. This type of trust is primarily utilized to maximize estate tax savings, as it removes the home's value from the granter's taxable estate. 3. Qualified Personnel Residence Trust (PRT): A PRT is a specialized form of an AP PRT that allows the granter to transfer the residence with a reduced value to the beneficiaries. This reduction is calculated by considering the term of the trust, the home's value, the current interest rates, and the granter's retained right to live in the property for a specific period. Parts are commonly used by individuals with estates exceeding the federal estate tax exemption limit. 4. Life Estate Personal Residence Trust: This type of trust enables the granter to retain the right to live in the property for a specified period while transferring its ownership to the trust. Once the term expires, the residence passes on to the designated beneficiaries. Allegheny Pennsylvania Personal Residence Trusts offer individuals a way to protect their primary residence, minimize estate taxes, and ensure a smooth transfer of assets to their loved ones. It is advisable to consult with an estate planning attorney specialized in Allegheny County laws to determine the most suitable type of AP PRT based on individual circumstances and goals.
