When you are planning your estate and looking for ways to protect your assets and beneficiaries, it’s easy to get overwhelmed by the options. This is why it’s smart to have an experienced Des Moines trust lawyer on your side. An attorney from our firm can help you figure out if something like a QTIP trust is a good fit for you. This is what you should know about this particular estate planning tool.
Get Help TodayA qualified terminable interest property, or QTIP, trust allows someone to control where their assets go after they die. Such a trust does not leave the surviving spouse with control of everything, but it does support them with an income that would allow them to keep up with their living expenses.
When your spouse passes away, all of the remaining assets are distributed to your chosen beneficiaries. This can help ensure that everyone gets something from your estate, but that no one can take the lion’s share of the assets and leaves others out.
A QTIP trust can be a good choice for anyone who has been married multiple times. The trust allows them to continue to support their current spouse, but there is no risk that the children from previous marriages will be left out of the estate plan. If you want to leave anything behind for children from previous marriages, that is an option. Your spouse cannot interfere with that plan even if there is bad blood between family members.
A QTIP trust is also a good way to reduce estate tax burdens. Because the trust continues to pay out to the surviving spouse over time, the total value of your estate gets reduced as they collect. These payments are also considered marital deductions, so your spouse would not have to worry about taxes on their income from the trust.
There could be tax issues to deal with when the surviving spouse passes though, so you do want to have an accountant keeping track of your assets and doing everything that they can to prevent issues for your beneficiaries later.
Like any other trust, a QTIP trust requires someone to manage it. This trustee needs to be responsible and someone you can depend on to carry out your will. Now a spouse is often a good choice to become a trustee, but they are not usually the best person to be put in charge of a QTIP trust. An attorney or another trusted loved one would probably be a better fit for the job.
If you are ready to learn more about QTIP trusts or any of your other estate planning options, make an appointment with the attorneys at Herting Law, PLLC. We can help you find the best way to protect your estate and its beneficiaries.
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