In short
A qualified terminable interest property (QTIP) trust gives a surviving spouse all its income for life, at least annually, and qualifies for the marital deduction if the executor elects it, while the first spouse decides who receives what is left.
Key takeaways
- No one other than the surviving spouse can receive principal during that spouse's life.
- The assets are included in the surviving spouse's estate.
- It suits blended families who want to provide for a spouse but leave the remainder to children from an earlier marriage.
Where it's tested
TCP: Estate & Gift Tax Planning — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A husband leaves his entire estate outright to his wife, a US citizen. How much federal estate tax is due on his death?