Define: Qualified-Terminable-Interest Property

QTIP refers to a type of trust that allows a spouse to receive income from the trust during their lifetime while ensuring that the remaining assets pass to other beneficiaries, typically children, upon the spouse’s death.

Unlike other trusts, QTIP provides the surviving spouse with income from the trust while preserving the ultimate distribution of assets to other beneficiaries. This allows for greater control over the distribution of assets and can be particularly useful in blended families or situations where the surviving spouse may need financial support.

QTIP trusts can provide certain tax benefits, such as deferring estate taxes until the surviving spouse’s death. However, it is important to consult with a tax professional to fully understand the specific tax implications based on your individual circumstances.

In most cases, the beneficiaries of a QTIP trust cannot be changed once the trust is established. However, there may be certain circumstances where modifications can be made, such as through a court order or with the consent of all parties involved.

Generally, a QTIP trust cannot be revoked once it is established. However, there may be certain circumstances where revocation is possible, such as through a court order or if all parties involved agree to the revocation.

While a QTIP trust can provide some level of asset protection, it is not specifically designed for that purpose. If asset protection is a primary concern, it is advisable to consult with an attorney who specializes in asset protection strategies.

No, a QTIP trust requires the existence of a surviving spouse to receive the income from the trust. If you do not have a spouse, alternative estate planning strategies should be considered.

Yes, a QTIP trust can be structured to provide for a disabled child’s financial needs while ensuring that the remaining assets pass to other beneficiaries upon the child’s death.

Yes, assets held in a QTIP trust can bypass probate, which can help streamline the distribution process and potentially reduce costs.

While it is possible to create a QTIP trust without an attorney, it is highly recommended to seek legal advice to ensure that the trust is properly structured and complies with all applicable laws and regulations. An attorney can also provide guidance on tax implications and help tailor the trust to your specific needs and goals.