89-89, the IRS held that an IRA is treated as QTIP if the principal balance payable at the date of death is payable in annual installments to a testamentary QTIP trust
over the surviving spouse's life expectancy.
One way to pay some estate tax in the transferor's estate is to make a partial QTIP election (or make no QTIP election) with respect to the QTIP trust
This area is still in flux but with appropriate planning, the benefits of an IRA can be paid into a QTIP trust
for distribution to the surviving spouse without jeopardizing the estate tax marital deduction.
One answer might be to separate assets otherwise passing to a surviving spouse on death into assets conveyed outright to that spouse and assets conveyed to a QTIP trust
for that spouse's benefit.
The balance of the estate not passing to the family trust would be placed in a QTIP trust
, which would qualify for a marital deduction but be included in the survivor's gross estate.
Trust beneficiaries and the QTIP trust
loaned the estate funds to pay the estate tax, and the estate attempted to deduct interest paid on the loan, which the IRS challenged.
That's especially true for people who are in a second (or even a third) marriage, because a QTIP trust
can prevent a second spouse from disinheriting children from a first marriage.
The designation of the QTIP trust
as a beneficiary did not trigger the acceleration of tax on the IRD when the plan passed to the trust.
The surviving spouse could disclaim her income interest in the QTIP trust
created by the first-to-die spouse.
5 million by the lime Daisy passes away, and the properly was owned by Daisy or by a QTIP trust
In this private letter ruling, the IRS allowed an extension of time for the executor of an estate to correct the decedent's failure to properly plan for generation skipping transfer ("GST") taxes when he created a QTIP trust
to pass assets to his beneficiaries.
I find this leads to much less of the A-B trust needs we are used to seeing, although there is often still the need for a QTIP trust
-- Qualified Terminable Interest Property -- and a discussion of the pros and cons.