Located in Cherry Hill, New Jersey. One solution to this problem is the Lifetime QTIP Trust. During the less wealthy spouse’s lifetime he or she will receive all of the trust income and may be entitled to receive trust principal for limited purposes. This trust must meet the following criteria to qualify for the unlimited marital deduction: Outright gifts to your spouse during life or after death lead to total loss of control. If you and your spouse are in this situation, a Lifetime QTIP Trust offers the following benefits: Planning Tip: As with other types of estate planning, Lifetime QTIP Trusts are not “one size fits all” and must be specifically tailored to each couple’s unique family dynamics and financial situation. The Lifetime QTIP Trust must be created for the benefit of a spouse who is a U.S. citizen – there is no such thing as a “Lifetime QDOT,” or Lifetime Qualified Domestic Trust (a trust used for non-citizen spouses). Under this strategy the “A Trust” is in fact a “QTIP Trust” which qualifies for the unlimited marital deduction, meaning that property passing into the trust will not be subject to estate taxes until the surviving spouse dies. Our services can also offer security for your family when they look toward the future. Danielle Browne, Esq. If you and your spouse have lopsided estates and families from prior marriages the problem is exacerbated by the difference in your wealth – while the well-to-do spouse will be just fine if the less wealthy spouse dies first, the opposite is not true. Not all married couples fit the Lifetime QTIP Trust profile. The remainder will be excluded from the wealthy spouse’s estate when he or she dies. Contact our team if you think you and your spouse fit the Lifetime QTIP Trust profile. CALL US: (856) 312-3630 QTIP, in tax law jargon, is “qualified terminable interest property.” Essentially, one spouse creates and funds this inter-vivos QTIP trust while alive. The less wealthy spouse must be the only one who has the power to appoint trust property. A federal gift tax return must be timely filed. As with other types of estate planning tools and strategies, Lifetime QTIP Trusts are not “one size fits all” and must be specifically tailored to each couple’s unique goals, family dynamics, and financial situation. Estate planning for couples in a second or subsequent marriage can be tricky, especially if their estates are disproportionate. The other spouse is the beneficiary of the QTIP trust. But what if instead of creating and funding the QTIP Trust after death, the wealthy spouse creates and funds the QTIP Trust for their spouse’s benefit with tax free gifts while the wealthy spouse is alive? Planning Tip: QTIP Trusts created during life or after death must meet certain requirements to qualify for the unlimited marital deduction: While at first glance QTIP Trusts may appear to be restrictive due to their multiple technical requirements, in reality they are quite flexible and will work well in a variety of situations. The “A Trust” holds the excess. We’re a legal service provider with offices in Mt. Estate planning for couples with disproportionate assets who are married for the second or third time can be tricky. If this describes your situation, a Lifetime QTIP Trust offers the following benefits: Lifetime QTIP Trusts are not “one size fits all” and are specifically tailored to each couple’s goals, family dynamics, and financial situation. DO YOU AND YOUR SPOUSE NEED A LIFETIME QTIP TRUST. Posted by Danielle Browne | Aug 19, 2020 | 0 Comments. One solution—the Lifetime QTIP Trust—allows the well-to-do spouse to maintain control of their property and wealth, but also protect and provide for the other spouse. Yes…Here’s Why, Copyright 2015 - 2020 by Northwest Legal Planning, LLC, Pet Trust – Protecting Your Other Children, Schedule a Complimentary Strategy Session. A “QTIP Trust” (qualified terminable interest trust) is a type of trust that allows a wealthier spouse to transfer an unrestricted amount of assets into a trust for the benefit of their less wealthy spouse. If you and your spouse are in this situation, a Lifetime QTIP Trust offers the following benefits: Do You and Your Spouse Need a Lifetime QTIP Trust? The less wealthy spouse must have the right to demand that any non-income producing property be converted into income-producing property. The less wealthy spouse must be the only one with the power to appoint trust property.
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