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| THE QTIP TRUST The QTIP Trust is used by married people to guarantee that the first decedent's assets benefit the spouse for his or her life ... and then to guarantee that the first decedent's people or causes receive benefits. It is generally used in conjunction with a By-Pass Trust and it receives the portion of the first decedent's estate that exceeds $600,000. The first $600,000 goes into the By-Pass Trust ... and the remainder goes into the QTIP Trust. The QTIP Trust is not created when you draw up your estate plan. Rather, it is authorized. In your will or in your Living Revocable Trust (LRT), you authorize your executor or trustee to create the QTIP Trust at your death. Each spouse will need to authorize the QTIP Trust in his or her will or Living Revocable Trust. Your LRT might say words to this effect, "If I am the first to die, put the first $600,000 into my By-Pass Trust. Put the remainder into my QTIP Trust." Both the By-Pass Trust and the QTIP Trust are designed to benefit the spouse for his or her life. They can be designed to give the spouse: 1. All income. 2. Five percent or five thousand (whichever is greater) annually. 3. Anything needed for the spouse's Health, Education, Maintenance and Support. At the end of the second spouse's life, both the By-Pass Trust and the QTIP Trust can go to the persons, institutions or trusts that were originally named by the first decedent. So, the beauty of the QTIP Trust is that it can benefit both spouse (as life beneficiary) and other persons or causes (as the ultimate beneficiary). One does not need to choose between spouse and others. Both can receive appropriate benefits. To leave assets to our institution through the QTIP Trust, you may name
your spouse to receive lifetime benefits ... and ... at his or her death,
leave some percentage, or some amount, to |
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