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Understanding the QTIP in Estate Planning
By Lawrence E. Howes; CFP™
By Joel B. Javer; CFP™
A qualified terminal interest property trust (QTIP) was designed for physicians and those who have children from a prior marriage.
QTIP Rules
The QTIP rules are complicated and deal with legal rights to assets and in whose estate the assets are titled. Suffice it to say that Congress has allowed a qualification to be put on the normal terminal interest rules to provide for this situation.
The result provides assets that qualify for the unlimited marital deduction, but your spouse does not control where the assets go upon the spouses death. The spouse is entitled to the income generated from the trust for life and is also entitled to the use of tangible property, like the home and contents.
Assessment
In addition to the above, these trusts provide the surviving spouse a limited power to access principal for health, education, maintenance and/or support [HEMS].
Conclusion
Please opine and comment if you have ever considered or used this strategy; and what was the result?
Book info: http://www.jbpub.com/catalog/0763745790/
Linguistics: www.HealthDictionarySeries.com
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