In the case of general power of appointment and QTIP trusts
, the integrity of the marital deduction is further enforced by the requirement that no one other than the surviving spouse can be a current beneficiary of the trust.
Like credit shelter or disclaimer trusts, QTIP trusts
can create tension, because the interests of multiple beneficiaries must be considered.
Surviving spouses who do not need the income interest generated by QTIP trusts
may want to give away the income interest during life to take advantage of the tax-exclusive nature of the gift tax (as opposed to the tax-inclusive nature of the estate tax).
Some examples of exceptions to these general requirements to qualify for the unlimited marital deduction include marital deduction and QTIP trusts
, as well as, transfers to non US citizen spouses.
are a staple of estate planning form books, and qualifying drafting language is readily available.
are a popular estate-planning tool for married couples with potentially taxable estates.
Rubin, "Tax Results of Settling Trust Litigation Involving QTIP Trusts
," (31) discusses such tax consequences in detail.
The proposed changes will affect any trust that relies on income to determine amounts properly payable to its beneficiaries and is subject to a power to adjust or unitrust amount under state law or its governing document; this includes simple trusts, complex trusts that measure distributions relative to trust income, QTIP trusts
, CRUTs, pooled income funds and trusts grandfathered from generation-skipping transfer (GST) taxes.
6) Inter vivos QTIP trusts
take advantage of new F.
Many taxpayers may need to consider funding QTIP trusts
with retirement assets.
Under the most common example equivalent to the standard QTIP trust
, the QDOT will have the same "qualifying income interest for life" as other marital deduction QTIP trusts
40] Furthermore, recent letter rulings have approved the use of marital QTIP trusts
in lottery planning.