Not That Kind of QTIP

Sometimes married couples creating trusts want to have a little more control over their assets after one of them is gone while still making sure to take care of the surviving spouse.

A qualified terminable interest property (QTIP) trust serves the dual purpose of providing income (as generated by the trust assets) for the surviving spouse for the remainder of his or her life, and then having the balance of the trust assets divided according to the wishes of the settlor (the person establishing the trust) amongst beneficiaries like children of the settlor or others after the surviving spouse’s death. This extra measure of control over who will be the ultimate beneficiaries can be helpful for individuals with children from a prior marriage. There are tax benefits as well. For individuals concerned about the federal estate tax exemption, a QTIP trust provides that estate tax, if applicable, is not assessed until after the second spouse has passed away.

QTIP trusts may not be for everyone. For instance, you may not be overly concerned about how your estate is distributed after you pass away, or you may want your surviving spouse to have everything and to then distribute the assets as they wish. If you are considering setting up an estate plan or revising an existing one, contact the attorneys at Wright Beamer at 248.477.6300.