Which term describes placing a residence into a trust for the benefit of a spouse, children, or charity?

Which term describes placing a residence into a trust for the benefit of a spouse, children, or charity?

• A. Qualified personal residence trust
• B. Charitable remainder annuity trust
• C. Clifford trust
• D. Testamentary trust

Answer: (A)

A Qualified Personal Residence Trust describes placing a residence into a trust while you retain the right to live in it for a set term, and then pass the home to beneficiaries such as a spouse, children, or even a charity. In a QPRT, the home is transferred irrevocably to the trust, which helps reduce the value of the gift for estate and gift tax purposes because you’re retaining an occupancy interest for a period of time. After that term, the residence goes to the named beneficiaries. This setup matches the scenario of placing a residence into a trust for the benefit of a spouse, children, or charity, with tax efficiency and clear transfer at the end of the term. The other options don’t fit: a charitable remainder annuity trust is about providing fixed payments to donors with remainder to charity, not primarily about transferring a home for family or charity use; a Clifford trust is not a standard or widely recognized term in modern estate planning; a testamentary trust is created by a will at death, not during the grantor’s lifetime.

A Qualified Personal Residence Trust describes placing a residence into a trust while you retain the right to live in it for a set term, and then pass the home to beneficiaries such as a spouse, children, or even a charity. In a QPRT, the home is transferred irrevocably to the trust, which helps reduce the value of the gift for estate and gift tax purposes because you’re retaining an occupancy interest for a period of time. After that term, the residence goes to the named beneficiaries. This setup matches the scenario of placing a residence into a trust for the benefit of a spouse, children, or charity, with tax efficiency and clear transfer at the end of the term. The other options don’t fit: a charitable remainder annuity trust is about providing fixed payments to donors with remainder to charity, not primarily about transferring a home for family or charity use; a Clifford trust is not a standard or widely recognized term in modern estate planning; a testamentary trust is created by a will at death, not during the grantor’s lifetime.