A trust is a fiduciary relationship in which one party holds legal title to another's property for the benefit of a party who holds equitable title to the property. An inter vivos trust is a trust that becomes effective during the lifetime of the person creating the trust (the settler or trustor).
A qualified terminable interest property trust, often referred to as a "QTIP" trust, allows a bequest to a spouse in trust that, after a proper election by the beneficiary spouse, qualifies for the unlimited marital deduction:
" if the beneficiary spouse is entitled to all of the income from the trust property,
" if the income is payable annually or at more frequent intervals, and
" if no person, including the beneficiary spouse, has the power to appoint any part of the qualifying property to any person other than the beneficiary spouse during the beneficiary spouse's lifetime.
In order that the property transferred to a surviving spouse by means of an inter vivos marital deduction trust qualify for the marital deduction, the property must be includible in the trustor's gross estate for federal estate tax purpose.
A Houston Texas Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death is a specific type of trust often established by married individuals in Houston, Texas, to provide for their children while still providing financial security for their surviving spouse. This trust allows assets to be transferred to the children from the deceased spouse's estate while ensuring that the surviving spouse receives income and support during their lifetime. In this type of trust, the "Inter Vivos" indicates that it is established during the lifetime of the donor or the person creating the trust. The acronym "TIP" stands for Qualified Terminable Interest Property, which means that the surviving spouse has a qualified interest in the trust's income, but the ultimate distribution of the trust's principal is determined by the donor's instructions. One of the key features of a Houston Texas Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death is that it allows the donor to provide for their children from a previous relationship while still taking care of their current spouse. It helps ensure that the children are provided for in the event of the surviving spouse's remarriage or if the surviving spouse decides to allocate the assets to someone other than the children. There may be several variations or types of Houston Texas Inter Vivos TIP Trusts with Principal to Donor's Children on Spouse's Death, such as: 1. Standard Houston Texas Inter Vivos TIP Trust: This is the basic version of the trust, where the principal assets are distributed to the children upon the surviving spouse's death according to the donor's instructions. 2. Split-Interest Houston Texas Inter Vivos TIP Trust: In this type of trust, the income from the trust is divided between the surviving spouse and the children, providing ongoing support for both parties. 3. Discretionary Houston Texas Inter Vivos TIP Trust: This trust grants discretion to a trustee to distribute income and principal as they see fit, adhering to the donor's intentions. It allows flexibility in providing for the surviving spouse and children's needs. 4. Charitable Houston Texas Inter Vivos TIP Trust: In certain cases, the donor may choose to establish a trust that provides for charitable beneficiaries in addition to the surviving spouse and children, aligning with their philanthropic goals. Overall, a Houston Texas Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death is a comprehensive estate planning tool that ensures both the financial security of the surviving spouse and the well-being of the donor's children from a previous relationship. It offers flexibility, protection, and ultimately allows the donor to decide how their assets are distributed while minimizing any potential conflicts or disputes among family members.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
