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Home » Guardianship » Shielding Your Domicile From Claimants With The Help Of An Oklahoma City Estate Planning Attorney

Shielding Your Domicile From Claimants With The Help Of An Oklahoma City Estate Planning Attorney

June 27, 2012 by Larry Parman, Attorney at Law

If you are interested in asset protection, your home, and perhaps your vacation home, will be part of the equation.  Should you be interested in a way to create a shield that protects your property from claimants you may want to consider placing your home into a qualified personal residence trust (“QRPT”).

Placing the home into the trust removes it from harm’s way, and part of the appeal of doing this is the fact that nothing really changes in your life.  When a QRPT is created you will select a term – say ten years – for the trust to continue.  At the end of the term ownership of the home passes to the beneficiaries of the trust.  Even after the term has expired you can go on living there as usual for as long as you would like.  Current law requires you to pay fair market value to the beneficiaries after the term of the trust expires.

While you are living in the home, you are retaining interest in it. So, while the act of transferring ownership of the home to the trust is considered to be a taxable gift, the taxable value of the property is reduced by the amount of the lifetime interest that you are retaining by living in the home.  As an example, if you transfer a home worth $500,000 into the QRPT your retained occupancy interest might reduce the taxable gift to $300,000.

As a result, when the beneficiary assumes ownership of the residence at the end of the trust term, the value of the property may be considerably more on the open market.  You might have transferred a property then worth $750,000 for a transfer cost of $300,000.  Of course, the minute that you funded the trust into the home, that resource was no longer a part of your estate for estate tax purposes.  And, depending on state law, you have created an additional layer of protection for the home from creditor claims.

These trusts can be a very useful component when you are constructing a comprehensive asset protection plan. To get all the details, simply take a moment to set up a consultation with a seasoned and savvy Oklahoma City estate planning lawyer.

Larry Parman
Author, President and Founding Attorney
Parman & Easterday

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Larry Parman, Attorney at Law
Larry Parman, Attorney at Law
Founder and Owner at Parman & Easterday
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
Larry Parman, Attorney at Law
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Filed Under: Guardianship Tagged With: Celebrity Estate Planning, Estate Planning Consultation, Free Estate Planning Reports, healthcare, Social Security

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