The statutory scheme revolves around the concept of "qualified terminable interest property" (commonly known as "QTIP"), which is defined as a subset of marital deduction trusts
under Code section 2056(b)(7).
A QDOT must meet the requirements for one of the other marital deduction trusts
. In addition, a QDOT must meet certain requirements to insure the collection of the deferred estate tax.
Both presidential candidates and Congress have made it clear that the federal estate tax is here to stay, and marital deduction trusts will continue to be an important part of estate planning.
A Practical Guide to Drafting Marital Deduction Trusts (with Sample Forms and Checklists) is available for $199 from The American Law Institute-American Bar Association's Web site at www.ali-aba.org/BK36K/ or by calling 1-800-253-6397.
Assets that are not used to fund the marital deduction trusts
(A and Q) are, by formula, placed into the family or bypass trust.
For example, marital deduction trusts
must normally distribute all income to the surviving spouse [IRC Sec.
Also this month, the ALI-ABA (Philadelphia, PA) published A Practical Guide to Drafting Marital Deduction Trusts
, a hardbound book that explains more than 150 common tax and non-tax issues attorneys may need to consider when drafting and funding marital deduction trusts
for federal estate tax purposes.
It highlights recent cases and rulings on valuation, family limited partnerships, deductibility of administration expenses and qualified marital deduction trusts
Marital deduction trusts
. These trusts, which are designed to take advantage of the marital deduction for spousal transfers of property, may be structured as living or testamentary trusts.
Working papers contain revised client interview forms, wills and trusts, including several for specialized situations, such as marital deduction trusts
, by-pass trusts and Crummey powers.
1) The QDOT must meet the basic requirements for any of the various marital deduction trusts
This newly-revised edition provides integrated analysis of the income, estate and gift tax aspects of numerous types of trusts -- including grantor benefit and control trusts, life insurance trusts, charitable trusts, revocable trusts, community property trusts, QTIP and other marital deduction trusts
and trusts for minors.