What is a QTIP Trust? (It has nothing to do with cotton swabs)

A QTIP, or qualified terminable interest property trust, is a type of trust that limits the surviving spouse’s access to and control of the trust property.  What happens is that the spouse has direct access to any income from the trust assets for life, but the trust’s principal is left to someone else, typically the children.  The QTIP trust controls not only the next beneficiary, but also who the following beneficiaries are, all the while providing for the surviving spouse and potentially providing marital deduction planning as well.

Here are some scenrio’s where a QTIP trust may be right for you:

• Concerned about surviving spouse remarrying and then providing assets to the new spouse (marrying the pool boy or secretary).
• Concerned abour the surviving spouse benefting someone other than the children (disinherting the children).
• Concerns over creditor attacks against the surving spouse.
• Concerns that the surving spouse may be vulnerable to poor financial decisions.

The QTIP trust is a great trust to not only plan for the marital deduction, but also provide spousal protection and ensure that your assets remain in the bloodline.

-Christopher J. Berry, Esq.
Bloomfield Hills Wills and Trusts Lawyer