A qualified terminable interest property trust (QTIP) limits a surviving spouse’s access to, and control of, the trust property. Its main objective is to enable your spouse to use your assets at the same time that you determine the distribution of those assets. Under a QTIP trust, the spouse has direct access to any income from the trust assets for the remainder of his/her life, but the trust’s principal is actually left to someone else, usually one’s children.
A QTIP trust can offer many benefits to your family, especially if you are in a second marriage and you want to protect your assets for your children. You should consider the following provisions before making a decision:
• Giving your spouse the ability to change trustees. It may be difficult for your spouse to deal with the trustee you have chosen, so you may want to give him/her the opportunity to appoint another individual.
• Deciding how much discretion your spouse will have to make withdrawals from the trust principal. Placing too many restrictions on your spouse’s ability to make withdrawals may cause conflicts with the trustee. It may be a good idea to discuss these provisions with your spouse before making any decisions regarding withdrawals.
• Reviewing the trust’s beneficiaries with your spouse. Your spouse needs to know that regardless of what happens to his/her financial or personal situation, the trust cannot be altered.
A QTIP trust offers you the opportunity to make sure that your wishes are carried out and that your spouse’s future is protected. An estate planning attorney can help guide you through the process.
To learn more, visit http://www.littmankrooks.com.