What are QTIP trusts?

Qualified terminable interest property trusts, also known as QTIP trusts, are trusts that allow the Grantor (the creator of the trust) to provide income for his or her surviving spouse after the Grantor’s death, while enabling the use (or partial use) of the unlimited marital estate tax deduction. While most QTIP trusts are created for estate tax purposes, they can also be used for remarriage risk concerns because the Grantor can structure the trust to preserve the principal of the trust for the benefit of his or her children, grandchildren, or other beneficiaries regardless of whether the surviving spouse remarries. There is one major catch - only the surviving spouse can benefit from the trust assets of the QTIP during his or her life. In other words, the children cannot directly benefit from a QTIP trust until the death of the surviving spouse. Otherwise, the unlimited marital deduction provision wouldn’t apply.

A trust can be a useful tool for various scenarios, but is not always necessary and is often oversold to increase attorney’s fees. So the question is: do you actually need a trust? Here are the three most common scenarios where a trust may make sense for you: To Avoid Probate on Out-of-State Property.

Death and money are likely among the top two things you don’t want to talk about around the dinner table. Yet you probably know very well that an estate planning conversation is something you should discuss with your family sooner rather than later. Otherwise, your survivors may misinterpret or fail to follow your intentions, which