Legal Question in Wills and Trusts in California

Are there any advantages of a personal residence trust versus a qualifed personal residence trust?


Asked on 8/18/10, 5:29 pm

1 Answer from Attorneys

John Martin Law Offices of John C. Martin

A personal residence trust is simpler. As a result, it would initially cost less money to establish. However, this simplicity comes with a price: personal residence trusts are far less flexible than their cousin, the qualified personal residence trust (QPRT). When using the former, the residence transferred into trust cannot be occupied by a person other than the grantor. As a result, there is no flexibility when illness, divorce, or other reasons make it impossible for the grantor to continue residing in the residence transferred. Also, the law is not clear on what happens when the residence is sold, and if, within two years, a replacement residence is purchased that does not absorb the entire sale proceeds.

A QPRT would be a far more practical option.

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Answered on 8/24/10, 9:11 am


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