Qualified Personal Residence Trusts Lawyers in Napa

Helping You Strategically Minimize Taxes on Your Estate

Your home is likely among your most valuable assets, so if you’re looking for ways to reduce the value of your estate to save on taxes, consider putting your home in a trust. An estate planning attorney will explain how a qualified personal residence trust (QPRT) will benefit your family. 

When you contact Celaya Law for estate planning advice, a skilled estate planning attorney will let you know which trusts work for your needs. Whether you have one home that’s a primary residence or you also have a vacation property, adding it to a qualified personal residence trust can save you and your family money on taxes.

Contact our Napa Valley firm to discuss this estate planning strategy with a lawyer.

What Is a Qualified Personal Residence Trust (QPRT)?

As you begin the estate planning process, you’ll notice that the most common tools include wills and trusts. In particular, many people choose a living trust, an irrevocable trust, or both. One type of irrevocable trust is the qualified personal residence trust. When you transfer a home to this trust, it’s no longer counted as part of your estate’s value, but you can still live in it for as long as you’d like. 

If you’re wondering why transferring ownership of your home is a recommended estate planning tactic, the answer is that by minimizing the size of your estate, you can avoid paying estate taxes when you leave the house to a beneficiary. In addition, once the house is in a trust, it will avoid probate, allowing your family to get this asset as soon as possible. 

If you own a house and are concerned about taxes as you begin estate planning, a QPRT may be right for you. Contact a skilled estate planning lawyer from our Napa Valley law office to discuss whether you should make this trust part of your estate plan.

What Are the Benefits of a QPRT?

Minimize Taxes

The main benefit is the ability to save money on taxes. When you transfer the home to a trust, your estate has a lower taxable value. Considering that estate taxes can be as high as 55 percent of your estate’s value, reducing or avoiding this tax can significantly increase the money your family will get after your death. 

Continue Living in Home

Another advantage is that you can keep living in the home after it’s in the trust. You’ll specify how long you want to live in it when you sign the trust documents, and you’ll get income tax deductions while you manage the house. If you decide to keep living in it past the date on the trust documents, you must pay rent, which will go toward the money your family gets after your death.

Untaxed Home Appreciation

In addition, any appreciation in the home’s value as you live in it won’t be taxed, saving your family more money. Since the house is not legally owned by you or your loved ones while in the trust, it’s protected from lawsuits, creditors, divorce proceedings, and other threats to your assets. 

If these benefits appeal to you, contact an estate planning lawyer to learn the next steps for protecting your home through qualified personal residence trusts, wills, family trust options, and more. An estate planning attorney at our law firm would be happy to review the benefits of every strategy meant for protecting your estate, from irrevocable and living trust options to wills and business succession planning.

What Are the Disadvantages of This Trust?

Not all estate planning tools are right for all estates, so reviewing your choices with an estate planning attorney is extremely helpful before signing trust documents. While QPRTs can benefit many estates, they have some downsides to know about while estate planning. 

Increased Liability

First, while these trusts can reduce estate taxes, they may increase your liability on other types of taxes, such as property tax. Also, if you owe money on the mortgage, this could complicate the legal process, since some mortgage payments could count against the exemption for gift taxes. Your estate planning attorney will advise you on how this could affect your estate. 

Irrevocable Terms

Unlike a living trust, a QPRT is irrevocable, so you can’t alter the terms if you change your mind.

Forfeit Home Ownership

Once you put your house in this type of trust, it no longer belongs to you. This also means you can’t refinance or use the home as collateral. Additionally, you must pay rent if you live in the house longer than the original terms allow. Otherwise, you could face legal issues. 

This is why you should review your estate planning options with a lawyer. While a QPRT is right for some estates, you might find that a family trust or other type of living trust would better meet your estate planning needs. An estate planning lawyer from our firm will gladly inform you of all your options. 

Why Should You Call a Qualified Personal Residence Trusts Attorney in Napa?

If you’re looking at estate planning strategies and want to learn more about using your home to save on estate taxes, contact our firm to talk to a knowledgeable estate planning attorney. We have assisted countless clients in finding estate planning options to ensure their family is provided for after their death. Whether you want to compare a living trust to an irrevocable trust or have questions about elder law and trust administration, we can assist you. 

Schedule a Free Consultation

Our helpful, friendly team offers a range of legal services for any family starting the estate planning journey, so we can help with everything from notary services to advice on elder law, wills, and trust administration.

If you’re ready to get legal counsel from an experienced estate planning attorney, call our Napa, CA law firm at 707-754-0977 for a consultation.