When There's a QPRT and GRATWhen There's a QPRT and GRAT

Turney P. Berry

At our firm, we're facing an unusual situation concerning a client who died in 2010 during the term of a qualified personal residence trust (QPRT) and a grantor retained annuity trust (GRAT). For about two decades, the decedent lived abroad and during that time, didn't keep comprehensive records of his finances. We and the estate are concerned that the decedent may have made unreported gifts, although no one has any knowledge of such gifts. So, both to avoid estate tax and minimize any gift tax issues, it's likely that the estate will decide to accept carryover basis rather than opt in to the estate tax regime.

Regarding the QPRT, the decedent has no surviving spouse and the residence passes, per the terms of the QPRT, into...