How a QPRT Works
You transfer your home into an irrevocable trust but keep the right to live there rent-free for a set term. At the end of the term, the house belongs to your children. Because they receive it years from now, the gift is valued at a steep discount today, so you use far less of your gift and estate-tax exemption, and every dollar the home appreciates from here grows outside your taxable estate. For a valuable home and a taxable estate, the savings can be large.
The Catch: You Must Outlive the Term
If you die before the term ends, the home is pulled back into your estate and the tax benefit disappears (you are no worse off, just no better). The term length is a trade-off: a longer term means a bigger discount but a higher chance of not surviving it. We model it to fit your age, health, and the home’s value.
Have a valuable home and a taxable estate?
A free 30-minute consult weighs a QPRT against your other options.
Book your free consultIs It Right for You?
A QPRT fits a valuable home, a taxable estate, and comfort committing the house on a timeline. It is one of several tools we weigh together with a dynasty trust, gifting, and a community property trust. For most families whose goal is simply avoiding probate and protecting the homestead, a lady bird deed or living trust is the better and far simpler fit.
Frequently Asked Questions
What Is a Qualified Personal Residence Trust?
A QPRT is an irrevocable trust you use to pass your home (or a vacation home) to your children at a reduced gift-tax cost. You transfer the house into the trust but keep the right to live there rent-free for a set term of years. At the end of the term, the home belongs to your beneficiaries. Because they only receive it years from now, the gift is valued at a steep discount today, so you use far less of your gift and estate-tax exemption, and all future appreciation in the home grows outside your taxable estate.
What’s the Catch?
You have to outlive the term. If you die before the term ends, the home is pulled back into your taxable estate and the strategy gives you no tax benefit (you are no worse off, but no better). So the term is chosen to balance a bigger discount, longer term, against the risk of not surviving it. It is a planning tool for people with a taxable estate, not for the average family.
Can I Keep Living There After the Term?
Yes, but you must pay fair-market rent to the new owners (your children or a trust for them). That sounds like a downside, but it is actually a bonus: the rent moves more money to your heirs free of gift tax, shrinking your estate further. It does require the family to treat it as a real arrangement.
Is a QPRT Right for Me?
A QPRT makes sense when you have a valuable home, a taxable estate (or expect one), and you are comfortable committing the house to your heirs on a timeline. It is one of several tools, alongside a dynasty trust, gifting, and a community property trust, that we weigh together. For most Florida families whose goal is simply avoiding probate and protecting the homestead, a lady bird deed or living trust is the better fit.
Sources of Law
- Qualified personal residence trusts: IRC §2702 and Treas. Reg. §25.2702-5. Florida trust law: ch. 736. Note Florida homestead and creditor rules interact with transferring a residence to a trust. (retrieved 2026-06-10)
Updated on June 10, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. General information about federal and Florida law, not legal or tax advice; coordinate with your CPA. Do not send confidential information until we have agreed to represent you.