Home in on tax savings with an RPM trust

Description

Abstract: For those wishing to transfer a personal residence to the next generation at a low tax cost, a remainder purchase marital (RPM) trust is worth a look. Although a qualified personal residence trust (QPRT) is a more common vehicle for transferring a home, an RPM trust offers several advantages. This article looks at the pros and cons of QPRTs, and how RPM trusts can offer a better alternative. (A sidebar gives an example.) On the downside, RPM trusts can cost more than QPRTs, and they aren’t officially sanctioned by the Internal Revenue Code. But by eliminating mortality risk and providing more flexibility, they may well be worth it.