Hillary Clinton’s recently released financial disclosure statement reveals that she and her husband both created a qualified personal residence trust in 2010 and transferred ownership of their NY home to it. They did not transfer their more expensive Washington DC house to a similar trust.
Several quick educational points:
1. A qualified personal residence trust allows them to transfer the house at a discounted gift tax value based on how long they wish to reside in the house and the current interest rates.
2. For example, if they decided to live in the house for the next 20 years (and not die), they would be able to transfer the entire $1.7 million house to Chelsea while only valuing it at $400K for gift tax purposes.
3. Future appreciation is also excluded from their estate.
4. They would have been wise to transfer the DC property via this technique because that house has doubled in value while the NY property has only increased nominally.
5. While this estate planning technique is available to everyone, I find it hypocritical that a woman campaigning for higher estate taxes and other taxes in the name of the greater good does everything she can to avoid those taxes.