Qualified Terminable Interest Property (QTIP) Trusts
A Qualified Terminable Interest Property (QTIP) Trust is a type of trust designed to provide income to a surviving spouse while allowing the trustor to control the distribution of the trust’s assets after the surviving spouse’s death.
In a QTIP trust, the income generated from the trust assets is distributed to the surviving spouse, while the principal remains in the trust for subsequent beneficiaries, typically the children of the trustor. This structure ensures that the surviving spouse receives financial support during their lifetime, but it also helps in managing the taxation and distribution of the trust assets after their passing.
For example, if a husband establishes a QTIP trust, his wife would receive all the income generated from the trust assets during her lifetime. Upon her death, the remaining assets in the trust would be distributed to their children or other designated beneficiaries, according to the terms of the
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