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 West Virginia Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death is a specific type of trust arrangement that is established during the lifetime (inter vivos) of the donor in the state of West Virginia. This trust structure is designed to provide for the surviving spouse while preserving the principal assets for the ultimate benefit of the donor's children upon the spouse's death. In a West Virginia Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death, the donor (usually the higher-earning spouse) transfers assets into the trust, which then provides income or other benefits to the surviving spouse during their lifetime. This ensures that the surviving spouse is well taken care of and enjoys a comfortable standard of living. The trust contains specific provisions that dictate that upon the surviving spouse's death, the remaining principal assets of the trust will be passed on to the donor's children from a previous relationship or any other designated beneficiaries. This allows the donor to maintain control over the ultimate distribution of their assets, ensuring their children are provided for even if the surviving spouse decides to remarry or has other beneficiaries in mind. It is important to note that while this type of trust arrangement is commonly referred to as an Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death in West Virginia, there might be variations and alternative names depending on specific circumstances and legal languages used in trust documents. Other types of similar trusts that serve a similar purpose include: 1. Inter Vivos TIP Trust with Income to Surviving Spouse: This trust arrangement functions similarly to the previously described trust, but rather than having the principal assets ultimately pass to the donor's children, the income generated by the trust is payable to the surviving spouse throughout their lifetime. 2. Inter Vivos TIP Trust with Limited Principal Distribution: In this variation, the trust may allow for limited distributions of the principal assets to the surviving spouse at specified intervals or under certain conditions, while still preserving the bulk of the assets for the donor's children on the spouse's death. 3. Inter Vivos TIP Trust with Multiple Beneficiaries: This type of trust expands the scope of distribution beyond the donor's children and the surviving spouse, allowing for additional beneficiaries to receive a portion of the trust's assets upon certain triggering events, such as the remarriage of the surviving spouse or the attainment of a certain age by the donor's children. Establishing a West Virginia Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death requires careful legal planning and documentation. It is crucial to work with experienced estate planning attorneys to ensure that all legal requirements are met and that the trust accurately reflects the donor's intentions and provides for the best interests of all parties involved.
