A Qualified Terminable Interest Property (QTIP) Trust is a marital‑deduction trust that gives your surviving spouse income for life while allowing you—not the spouse—to control who ultimately receives the assets. It’s one of the most powerful tools for blended families, tax‑efficient wealth transfers, and protecting children from prior relationships. Below is a clear, practitioner‑level breakdown tailored to how you think about estate‑planning structures.
A QTIP Trust is an irrevocable trust that:
- Provides all income (and optionally principal under an ascertainable standard) to the surviving spouse for life.
- Qualifies for the marital deduction, so no estate tax is due at the first spouse’s death.
- Allows the first spouse to die to control the remainder beneficiaries (typically children from a prior marriage).
- Causes the trust assets to be included in the surviving spouse’s estate at their death for estate‑tax purposes.
📌 Key idea: The surviving spouse is protected, but cannot redirect the assets. Control stays with the first spouse to die
When is it good for?
One spouse is significantly wealthier and older than the other. CST + QTIP.
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