Written by Ryan Anderson, Sr. Partner and Private Wealth Advisor, and Mike Bleck, Partner and Sr. Estate Planning Advisor A Qualified Personal Residence Trust (QPRT) allows you to transfer your home to heirs at a reduced gift tax value, while retaining the right to live there for a set number of years. This approach works well when: You own a high-value primary or vacation home.
Written by Ryan Anderson, Sr. Partner and Private Wealth Advisor, and Mike Bleck, Partner and Sr. Estate Planning Advisor
A Qualified Personal Residence Trust (QPRT) allows you to transfer your home to heirs at a reduced gift tax value, while retaining the right to live there for a set number of years.
This approach works well when:
- You own a high-value primary or vacation home.
- You expect significant appreciation.
- You want to use part of your exemption efficiently.
How It Works
- Transfer home into QPRT.
- Retain right to live there rent-free for term (e.g., 10–15 years).
- IRS values the gift as full home value minus retained interest (based on §7520 rate).
- After term ends, home passes to heirs (or trust for them).
- If you wish to stay, you pay fair market rent, further reducing your estate.
Example
$5M vacation home, 10-year term, §7520 rate 4%, age 60:
- Retained interest valued at ~$2M.
- Taxable gift = ~$3M.
- If home grows to $8M in 10 years, all $3M in appreciation is outside your estate.
Risks
- If you die before term ends, property comes back into estate.
- Irrevocable so you can’t take the home back.
- Heirs take your basis (potential capital gains later).
Ryan Anderson is a private wealth advisor and senior partner in Blue Trust’s Private Wealth division, serving clients in Houston and Dallas. Ryan works with individuals, families, foundations, and business owners on financial planning, charitable giving strategies, and long-term wealth stewardship, with particular experience advising physicians, entrepreneurs, and energy industry professionals.
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