Qualified Terminable Interest Property Trust

(redirected from Q-TIP Trusts)

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 ?
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.
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.
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.