top of page

What are the benefits of having a QTIP trust?

There are two main benefits of having a QTIP trust. First, a QTIP trust pr5 & 5 ovides tax flexibility for your Executor. In some situations, it may be more beneficial for your Executor to claim a marital deduction for assets transferred to the QTIP trusts than to take the marital deduction. Giving the Executor such flexibility will allow them to minimize the tax paid between you and your spouse. In most marital trust arrangements, the surviving spouse has full access to the marital portion of the trust. In contrast, a QTIP trust limits the surviving spouse’s access. He or she may receive income from a QTIP trust but may not make decisions on how to distribute the trust’s assets nor may he or she withdraw from the principal of the trust apart from a $5,000 or 5% of the trust's fair market value each year, commonly known as a "5 by 5 Power". QTIPs are particularly useful for second marriages, where one seeks to ensure that the second spouse is provided for during life and thereafter, the bulk of trust assets only pass to the children with the first spouse, not to the children from a second spouse.

5 views0 comments

Recent Posts

See All

Testamentary capacity refers to an individual’s mental and legal ability to create or alter their will. The testator, the person making the will, must possess the necessary capacity to understand the

A Will contest is a legal proceeding in the Surrogate’s court that is available for an individual who seeks to question the validity or fairness of a Will. In New York, the individual must have standi

bottom of page