When most people hear the term QTIP, they think of the cotton swab. In legal terminology, a QTIP is a type of trust fund – a marital trust account that lets you provide for your spouse while also protecting assets for future generations. It’s often used in instances of a second marriage in which case, it allows a surviving spouse to receive an income from your estate while simultaneously safeguarding remaining income for your children and grandchildren.
A QTIP trust means you set specific conditions on the distribution of your property and assets. It comes with several requirements including that its assets must pass to the surviving spouse and the net income must be distributed (at minimum) on an annual basis. As part of the estate planning process, a QTIP trust account has many benefits as well. It’s managed by an executor which can help limit certain risks. For example, as a wealth management tool, it offers estate tax reduction and capital gains tax reduction.
It can also provide a way to protect your spouse from creditors and potential scammers. Because many unscrupulous scams prey on senior citizens, limited access to funds can actually work in your spouse’s favor. It’s also beneficial should your spouse become physically or mentally incapacitated.
Establishing a QTIP trust allows you to control how your property and assets are distributed after your death. It helps your family avoid a lengthy probate process and lets your assets pass to your spouse without incurring additional estate taxes.
Providing for your spouse and your children is important. A QTIP trust is a smart way to make sure both parties are taken care of after your demise. The complex nature of setting up a QTIP trust means you want an estate planning expert on your side. At Grissom Law, LLC, our attorneys have the experience that you can count on to make sure your final wishes are met. Call us today to start creating the estate plan you need.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney client relationship between you and Grissom Law, LLC.