A Q-TIP Trust may be used to qualify property for the marital deduction. All the
ID: 2718683 • Letter: A
Question
A Q-TIP Trust may be used to qualify property for the marital deduction. All the following statements concerning the requirements that must be met for an effective Q-TIP Trust are correct EXCEPT:
A. All the income must be paid to the surviving spouse, at least annually.
B. The surviving spouse may be authorized to invade the trust corpus.
C. The trust corpus may pass directly to the children of the marriage upon the death of the second spouse.
D. The surviving spouse must be given a general power of appointment over the principal at time of death.
Provide a detailed explanation for your answer. Answer only if you have a strong estate planning background.
Explanation / Answer
A Q-TIP Trust may be used to qualify property for the marital deduction. All the following statements concerning the requirements that must be met for an effective Q-TIP Trust are correct EXCEPT
D. The surviving spouse must be given a general power of appointment over the principal at time of death.
Note :
QTIP trusts are typically used by individuals who have been married more than once and have children from a previous marriage they want to continue to provide for to retain the control on trust even after surviving spouse dies,the trust is transferred to second spouse after the death of first spouse and it may be passed directly to the children of the marriage upon the death of the second spouse, A QTIP trust may be used for the sole benefit of the surviving spouse during his or her lifetime, but its terms require that the surviving spouse have a qualifying income interest for life atleast annually,The surviving spouse may be authorized to invade the trust corpus.