THE CURIOUS CASE OF QPRTS: UNDERUSED AND UNDERAPPRECIATED

By Bruce Givner, Esq. and Owen Kaye, Esq.^*

I. INTRODUCTION

Qualified personal residence trusts ("QPRTs") have been available for nearly twenty years.¹ They have been recognized as excellent structures for both estate tax and asset protection planning for equity in the residence,² which is often the most emotionally important family asset. Numerous authoritative texts and articles provide guidance on important QPRT drafting and tax issues.³ The IRS has issued helpful rulings.⁴ Yet, a 2001 article noted that "QPRTs…remain underutilized,"⁵ and empirical evidence suggests that little has changed since then.⁶ Current economic uncertainties, which create fear in the minds of homeowners, and favorable nontax precedent (discussed below), warrant a fresh, straightforward reconsideration of QPRTs.

II. TRANSFER TAX ADVANTAGES