That strategy is similar to the qualified personal residence trust. You could gift your home – usually to your children – and retain a life estate. Though the life estate can be claimed by your creditors, you can avoid its seizure by pledging your life estate interest as collateral for a loan. Or you can lease-back the property for the term of your life through a protective entity – such as an LLC. You achieve a similar result by titling your home to an irrevocable trust and retaining a life estate. Your home would transfer to the trust beneficiaries upon your death. Still another variation on the theme is to sell your home to your children in exchange for a self-liquidating loan which can be cancelled during your lifetime or upon your death. Here, too, you would retain a life estate to the home.
