Preserving wealth across generations demands innovative and adaptive planning, particularly for individuals with substantial residential real estate holdings. Although the Qualified Personal Residence Trust (QPRT) technique was added by Section 2702 to the Internal Revenue Code almost 30 years ago, the QPRT strategy continues to be a powerful estate planning tool, offering significant advantages for transferring residential property to beneficiaries while minimizing gift and estate tax exposure. In addition to meeting the statutory requirements under Section 2702, maximizing the benefits of QPRTs requires a nuanced understanding of a QPRT's term optimization, direction of interest rates, appropriate property selection and integration with a client's overall estate plan.

Market volatility, while unsettling for investors, may offer unique estate planning opportunities that sophisticated clients should consider. During periods of significant market fluctuation, certain wealth transfer techniques become particularly advantageous from both tax and succession planning perspectives. The strategic deployment of these approaches can transform temporary market declines into long-term family wealth preservation advantages.

The impact of diminished capacity on estate planning is a particularly critical issue for individuals with significant assets, as the stakes are higher and the potential for family conflict or financial mismanagement increases exponentially. Diminished capacity, whether due to age-related cognitive decline, illness or injury, can severely impact an individual's ability to make sound financial and legal decisions. For high net worth individuals and families, this can lead to disastrous consequences, including the mismanagement of substantial assets, vulnerability to financial exploitation and the potential for contentious legal battles among beneficiaries. The challenge lies in balancing the need for proactive planning with the sensitivity of discussing potential cognitive decline. Many clients are understandably reluctant to confront this possibility, viewing it as a loss of independence or a sign of weakness. However, addressing this issue head-on is crucial for protecting not only the client's assets, but also their legacy and family harmony.