Marital-Deduction Trust

marital-deduction trust

A trust designed to pass assets to a spouse. The trust is used instead of leaving the assets to the spouse directly. The beneficiary receives income from the trust until his or her death, at which time the trust's assets are distributed or the trust is included in the deceased's estate. See also QTIP trust.

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Marital-Deduction Trust

A trust into which the trustor deposits funds and other assets to provide for a surviving spouse while also maintaining control of what happens to those assets after the surviving spouse dies. In a marital-deduction trust, the trustor names his/her surviving spouse as beneficiary and stipulates that income and/or principal from the trust shall pass to that spouse upon the trustor's death. However, when the surviving spouse also dies, what remains in the trust is distributed to heirs as if it had been a part of the trustor's estate. A marital-deduction trust is common when a person has children from a previous marriage; the trust provides for the surviving spouse but later is transferred to the children from one's previous marriage to ensure that the estate takes care of them as well. It is also called a Q-TIP.