If your estate is substantial and you’re concerned about the tax hit on your heirs, there’s a smart way you can use your house to save big on taxes.

It’s as simple as giving away your home and as complex as knowing the mechanics of an estate planning tool called a Qualified Personal Residence Trust (QPRT).

With a QPRT, you basically transfer your home (or vacation home) to a trust while you retain the right to continue living there for the trust term. After that, your kids or other designated beneficiaries become the owners of the property. If you still want to stay in the house, you can work out a rental arrangement with them.

Transferring property to a QPRT is considered a taxable gift, but you get a substantial break. The value of the house is discounted for gift tax purposes because you’re allowed to continue living there for the term of the trust.

The advantages of a QPRT: It allows you to get your home out of your taxable estate at a reduced tax cost. And because setting up the trust is a private transaction, there is no public record at your death than can be contested.

Sound too good to be true? A QPRT can save your heirs a bundle in taxes. However, the trust is irrevocable and the laws are complex. So you need a firm grip on the pros and cons of QPRTs before you give away such a valuable – and emotionally loaded – asset.

Here are four considerations when establishing a QPRT:

#1  Get an expert. Consult with a tax adviser who specializes in estate planning – one mistake and the trust could be worthless.

#2  Pick a short term. Your goal is to continue living in the home but take it out of your estate, so choose a term for the trust that you expect to outlive. If you die before the term, your home goes back into the estate and is assessed at fair market value, so you gained nothing in terms of estate tax savings.

#3  Get a handle on your future. If you’re planning to rent the house from your children or other beneficiaries, don’t make the future rental a provision of the QPRT. The IRS could view it as a retained interest and invalidate the trust. Don’t set up a QPRT unless you have a good relationship with the beneficiaries, including in-laws. You don’t want to worry about being thrown out someday. Once you do start renting, keep in mind that the rent must be at fair market value.

#4  Stay put. It’s important to remain in the home for the duration of the trust or you risk losing the tax benefits.