Grantors own shares of stock in a cooperative apartment building.
Grantors acquired the cooperative stock shares and proprietary leases to the property, and the shares and leases are considered community property under the state law of Grantors' domicile. Grantors now propose to create a qualified personal residence trust to which they will transfer their interest in Residence. They originally intended to transfer the legal title to the shares and proprietary leases to Trust, but the co-op association has disapproved their request to do so. Grantors will have the right to reside in Residence during the 13-year term of Trust. The lease agreement provides that Grantors will pay a fair market value rent as determined by an independent appraisal and will pay all real estate taxes as well as all costs for maintenance, utilities, and repairs.