Qualified Terminable Interest Property Trust

(redirected from Marital Deduction Trust)

Qualified Terminable Interest Property Trust (Q-TIP)

A trust that allows a surviving spouse to receive income generated from the trust, while the actual distribution of the trust's assets is made to other beneficiaries such as the grantor's children.

Qualified Terminable Interest Property 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 Q-TIP, the trustor names his/her surviving spouse as beneficiary and provides 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 Q-TIP is a common trust when a person has children from a previous marriage; that Q-TIP provides for the surviving spouse but later is transferred to children from one's first marriage to ensure that the estate takes care of them as well.
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To satisfy the QDOT rules and obtain the marital deduction, not only does the property have to be transferred to a QDOT and a timely election made on the estate tax return, but the marital deduction trust requirements must also be satisfied.
Estate tax planning for a U.S. citizen with a noncitizen spouse
The 2008 Cumulative Supplement to A Practical Guide to Drafting Martial Deduction Trusts updates the text of the main volume and includes the two complete updated marital deduction trust forms.
A Practical Guide to Drafting Marital Deduction Trusts, Including 2008 Cumulative Supplement
An example of good trust planning is a marital deduction trust.
Finding the right trustee
A trust can be structured to provide income to a surviving spouse without qualifying as a marital deduction trust.
A primer on trusts
To address this problem, B could revise his will so that the stock and other assets going to A's benefit will be transferred from his estate to a qualifying marital deduction trust following his death.
Qualifying a marital deduction trust as an eligible S shareholder
The most common plan for a married couple involves the preparation of a credit shelter trust and marital deduction trust for both husband and wife.
The use of disclaimers for flexibility in planning for qualified retirement assets
The trust instrument further said George and Lavedna's intention was the marital deduction trust property "may qualify" for the qualified terminable interest property (QTIP) deduction and "shall only" be taxed in the estate of the second spouse to die.
QTIP deduction allowed despite accumulation clause in trust
Although this tax deferral can be accomplished by simply making an outright devise to the surviving spouse, the use of a marital deduction trust is also widely used to achieve this result.
What distributions can be made from a marital trust?
Thus, the IRD will be included on the estate income tax return, and will not be taxed to the surviving spouse or to the marital deduction trust.
Income in respect of a decedent: minimizing the double taxation
If the spouse so elected, the decedent's separate property, together with both his and his spouse's interests in community property, would be transferred to a marital deduction trust in which the surviving spouse had a right to income for life.
Significant recent developments in estate planning
In Clayton,(78) the decedent's will provided that the residue of his estate be allocated between two trusts: the first funded with an amount equal to the unified transfer tax credit equivalent and the second a QTIP marital deduction trust.
Significant recent developments in estate planning
With properly written terms, S stock can fit neatly into a standard marital deduction trust.
Placing S stock in trust

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