Qualified Terminable Interest Property Trust

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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.
References in periodicals archive ?
1 A, however, in combination with the Q-TIP election fas provided in IRC section 2056 (b)(7)], a surviving spouse is permitted to satisfy the right of election by taking income for life and the marital deduction is allowed as long as no other person has any rights in the Q-TIP trust during the surviving spouse's life.
In such a situation, an advisor should point out that using certain types of trusts, such as credit shelter trusts and Q-TIP trusts, could accomplish this goal.
Federal law requires that all of the income of the Q-Tip trust be distributed to the spouse.
With careful drafting, it is possible to qualify a QSST as a Q-TIP trust for the primary benefit of the shareholder's surviving spouse.
The IRS ruled that the IRA itself qualified as a Q-TIP trust since the income earned on the undistributed portion of the IRA, as well as the income earned on the portion of the IRA distributed to the Q-TIP trust, would be distributed annually to the decedent's spouse for life and no person other than the spouse would have a power of appointment.
As such, the trust qualified as a Q-TIP trust under Sec.
Upon the surviving spouse's death, the balance of the IRA is to be distributed to the Q-TIP trust.
Corporate and personal trust services include: asset protection trusts, q-tip trusts, irrevocable and revocable personal trusts, credit shelter trusts, incentive trusts, marital trusts, residuary trusts, generation skipping transfer trusts, estate settlement trusts, dynasty trusts, irrevocable life insurance trusts, and private annuity trusts.