A trustee reference guide for QPRTs after the residence sells 

A QPRT works cleanly right up until the residence is sold during the term. At that point, the trustee has roughly two years to either reinvest the proceeds in a replacement residence or convert them to a qualified annuity interest, and the trust instrument must contain the right language for either path to work. When it does not, the planning benefit your client paid for can disappear.

We wrote a guide for the attorneys and trustees who deal with this. It covers the reinvestment window under Reg. 25.2702-5(c)(7), GRAT conversion when no replacement is purchased, the early-termination consequences under IRC 2036, a post-sale decision flowchart, and a checklist of the provisions an instrument needs before a sale is on the table.

It is intended for use by estate planning professionals and does not constitute legal advice. Our hope is that it earns a place in your reference shelf and proves useful the next time one of these situations lands on your desk.