There are several estate planning tools at your disposal, let alone several kinds of trusts that you may incorporate into your plan. For example, there is the qualified terminable interest property (QTIP) trust, which is typically recommended for married couples. With this, you may wonder whether this type of trust is preferable compared to a marital trust. Continue reading to learn the advantages of a QTIP trust and how an experienced Broward County trust lawyer at The Probate Lawyers can help determine whether this is the best estate planning tool for you.
What is the function of a QTIP trust?
Firstly, a QTIP trust is an irrevocable trust that enables you (i.e., the grantor) to financially provide for your spouse at a time when you are, unfortunately, no longer around. Further, it enables you to maintain control over how your financial assets are distributed once your surviving spouse has, unfortunately, passed on themself.
So, with a QTIP trust, your surviving spouse will be the sole recipient of annual payments. These payments will stop upon their unfortunate death, and they may not be transferrable to another individual. Rather, the remaining assets within a QTIP trust will become the property of your listed beneficiaries.
What are the advantages of a QTIP trust over a marital trust?
To reiterate, the way a QTIP trust works is that its generated income, and possibly even the principal, is given to your surviving spouse to ensure their financial protection for the rest of their life. A marital trust works similarly, except that it allows your surviving spouse to dictate how your assets are distributed. Or, it allows your surviving spouse to forego an annual distribution entirely. What’s more, it even gives your surviving spouse the authority to appoint new beneficiaries following your passing.
This is all to say that the main advantage that a QTIP trust has over a marital trust is that it does not pass control over to your surviving spouse. More specific examples as to why a QTIP trust may be more advantageous are as follows:
- You can control who your assets pass to after both you and your spouse have passed on (i.e., children, grandchildren, children from a previous marriage, etc).
- You can protect your assets from being taken by thieves or scammers, or otherwise from being accidentally signed away by your surviving spouse.
- You can protect your assets at a time when your surviving spouse can no longer make financially sound decisions.
- You can protect your assets from an incident when your surviving spouse is being pursued by creditors.
At the end of the day, your trust planning requires a skilled Broward County estate lawyer in your corner. So please get in touch with us at The Probate Lawyers.
