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Inter Vivos QTIP Trust with Principal to Donor's Children on Spouse's...

Bexar Texas Inter Vivos QTIP Trust with Principal to Donor's Children on Spouse's Death

Name: Bexar Texas Inter Vivos QTIP Trust with Principal to Donor's Children on Spouse's Death
Brand: US Legal Forms
Rating: 4.56 (369 reviews)

Category:

Trusts - QTIP

State:

Multi-State

County:

Bexar

Control #:

US-02630BG

Format:

Instant download

Description

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.

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How to fill out Bexar Texas Inter Vivos QTIP Trust With Principal To Donor's Children On Spouse's Death?

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FAQ

The answer lies in the use of a QTIP Trust. During the husband's lifetime, he can make unlimited marital gifts to his wife. If he makes them into a QTIP Trust, the assets are qualified for the marital deduction for gift and estate tax purposes.

Depending on the principal invasion standard and nature of assets in the trust, the surviving spouse may be able to act as her own trustee over the QTIP. There are a multitude of reasons why a QTIP trust may make sense for your estate plan.

Yes, but naming the surviving spouse, as a Trustee should be done only after reviewing all the facts and counseling with your advisors. In a first time marriage where both spouses have great confidence in each other, it is common for the surviving spouse to be designated as a Trustee of the Family and Marital Trusts.

You can also name your surviving spouse as a Trustee. However, keep in mind that will give them broad access to the assets in the Trust, which may defeat the purpose of setting up a QTIP at all.

The QTIP trust terminates when the surviving spouse dies, and the assets are distributed to the final beneficiaries. The trust assets are counted as part of the gross estate of the surviving spouse and taxes must be paid if it is valued over the exemption limit.

In those cases, a simple 5 or 5 power, which allows the surviving spouse to distribute the greater of 5% or $5,000 of the marital trust to himself or herself, could be used, although any gift made under that power would incur a gift tax.

If you create a QTIP trust, then at your death no estate tax is due on the assets that go into the trust. The assets qualify for the unlimited marital deduction, which lets all property, regardless of value, pass to a surviving spouse free of estate tax.

The QTIP election is a common way to qualify property passing in trust from a decedent to a surviving spouse for the estate tax marital deduction.

When you set up a QTIP, you must name a trustee as well as beneficiaries. You can name your spouse to be the trustee, choose one of your adult children, or pick a disinterested third party.

Bexar Texas Inter Vivos QTIP Trust with Principal to Donor's Children on Spouse's Death

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FAQ

Can surviving spouse make gifts from QTIP trust?

Can surviving spouse be trustee of QTIP trust?

Can surviving spouse be trustee of family trust?

Can a surviving spouse serve as trustee of a QTIP trust?

Is a QTIP trust included in the surviving spouse's estate?

Can you gift from a marital trust?

Is QTIP property included in surviving spouse's estate?

Can surviving spouse make QTIP election?

Who can be trustee of QTIP?

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