• Interest rates are high: A qualified personal residence trust (QPRT). A QPRT is a trust used to transfer a primary residence to beneficiaries, usually children, with minimal gift tax consequences. The grantor retains the right to live in the house free of charge for a set period of time, after which the property, and any attendant appreciation in value, goes to the beneficiaries. The value of the initial transfer into trust for gift tax purposes is determined by a calculation that relies heavily on interest rates. Here, a higher interest rate results in a lower present value of the remainder and therefore a lower gift value when the trust is established.

The better approach here is that while we are clearly in a period of rising interest rates, as of this writing, they are still comparatively low. If any of these low-rate strategies make sense for you, now may be an opportune time to act before the window closes.

Times change continuously and so must your strategic and proactive estate planning if you want the estate tax to remain a voluntary tax. It’s paramount to always engage an experienced estate planning professional and listen to his/her advice!

Nick Bertha is president and CEO of Fieldpoint Private Trust, and director of wealth and trust planning at Fieldpoint Private.

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