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.

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Q, prominent on the website iloveqatar.net and hosts a show called QTips on YouTube, which educates viewers on local Arabic customs.

Shangri-La Doha and Mr. Q head to Hong Kong

See Pennell, 843-2nd Estates Gifts, and Trusts Portfolios (cited in note 14), for a discussion of Clayton QTIPs and other marital deduction drafting techniques.

The Illinois QTIP election to the rescue

QTIPs may also be used to protect a financially unsophisticated spouse from being taken advantage of or frittering away an inheritance due to a lack of understanding of the financial markets.

Planning for the surviving spouse with a QTIP trust

A review of extrinsic evidence, correspondence between the decedent and his attorney and the succession of earlier wills indicated Charles was knowledgeable about estate tax laws, had created and revoked QTIPs under earlier wills, had not wished to relinquish control of assets to minimize estate taxes and was aware of the value of his estate after taxes as structured in the 1993 will.

QTIP created under state law not federally binding

The chapter discusses popular estate-planning tools, such as QTIP elections, unified credit shelter trusts, disclaimers, private annuities, qualified personal residence trusts, direct payment of college expenses, and use of newer insurance products, as well as some less familiar devices, including gifts to [section] 529 plans and Clayton QTIPs.

Seth Hammer, Investments and Taxes: a Practical Guide for Financial Advisors

Myth: QTIPs are not a good estate planning tool for second marriages if there are children from a prior marriage.

COMMON ESTATE PLANNING MYTHS

New features include IRC Chapter 14 -- Special Valuation Rules and its effect on value freezing as well as a new marital deduction chapter detailing the latest developments affecting QTIPS. The text reflects chapters 11, 12 and 13 of the Internal Revenue Code including the latest changes by time of publication.

Taxation of Estates, Gifts, and Trusts, 1991-93 Edition

(25) IRS Letter Ruling 9925027 (3/25/99); see Easton, "Recent Developments in QPRTs and QTIPs," 31 The Tax Adviser 416 (June 2000).

Significant recent developments in estate planning

The recent Revenue Ruling 2000-2 on qualified terminable interest property trusts (QTIPs) is consistent with the Treasury regulations that have governed QTIPs for many years and renders the much-contested Revenue Ruling 89-89 obsolete.

Designating a QTIP as the Beneficiary of an IRA Under Revenue Ruling 2000-2

Although gift and generation-skipping taxes, QTIPs and late filings are among the most common liability risks to CPAs, there are many other subtleties to estate tax law.

Form 706: the not-so-simple estate tax return

A major aspect of estate planning for high-net-worth individuals is the proper use of the marital deduction, including use of bypass trusts and QTIPs, to keep the total estate taxes for both spouses to a minimum.

An examination of the marital deduction final regulations

2056(b)(7) provides an exception to the terminable interest rule for QTIPs. This exception allows the estate of the first spouse to die to obtain a marital deduction for property, even though the surviving spouse has no control over the property's ultimate disposition.