The most frequently asked question, therefore, is whether the Settlor can continue to live in the residence at the end of the trust term. The answer to this question depends on several factors. These factors and various options are discussed below. Life Interest Granted to Spouse . Hence, so long as the Settlor and his or her spouse each choose to live together, the QPRT design is intended to provide significant estate tax savings as well as the continued use of the residence by the Settlor for life.
Residence passes to children .
One option is to create the trust to provide for the residence to pass to the younger generation family members with no strings attached. In this case, the Settlor would not have any right to live in the residence after the Retention Term. Of course the children may always choose to rent the residence to the Settlor and his or her spouse, but there is no guarantee. This option may not be desirable if this is a concern. Moreover, if any of the Settlor's children have creditor problems this may be an unattractive option.