Many decisions in estate planning require balancing competing interests. You want to provide something for everyone. You choose to provide for your surviving spouse for the remainder of their life. You want to ensure that when your surviving spouse passes away your assets pass to your children. A Qualified Terminal Interest Property trust allows you this control. Your surviving spouse benefits from the income of the trust or the use of the property during their lifetime. Upon your spouse’s eventual passing, the assets of the QTIP trust will transfer to beneficiaries of your choice.
You must be married to set up a QTIP trust and it is often part of a more complex estate plan. Proper planning will be required to ensure that any assets passing outside the QTIP Trust, will further be consistent and not detract from your estate planning goals. The residual beneficiaries of the trust may need assets immediately, so those assets would be outside the trust and you may decide to also benefit your spouse beyond just the trust assets.
Once you have decided to establish a QTIP trust, you are protecting all beneficiaries to some extent. Your spouse can use the assets of the trust and no one can take away this use. When your spouse passes away, the remaining beneficiaries are guaranteed to get what you have designated to them.