| Alan R. Horvath, Attorney at Law |
| Frequently Asked Trust Questions |
| Phone: 209 754-5291 Fax: 209 754-5293 |
| ahorvathlaw@sbcglobal.net |
P.O. Box 81
596 Mountain Ranch Rd.
San Andreas, CA 95249
596 Mountain Ranch Rd.
San Andreas, CA 95249
What is a QTIP trust?
QTIP stands for Qualified Terminable Interest Property. This is a IRS definition. Normally, on the death of one
spouse, it is the decedent's separate property and his or her share of the community property that is subject to the
estate tax at that time. The surviving spouses share of the community property and the surviving spouse's
separate property are not part of the decedent's estate.
It is possible to reduce the decedent's estate tax liability by leaving gifts outright to the surviving spouse. However,
assets held under directions specified by the decedent are still part of his estate even if there is an income benefit
provided to the surviving spouse for life.
QTIP is an IRS invention that allows a decedent, by meeting certain criteria, to leave an interest to the surviving
spouse, that terminates upon the survivors death, but will still be included in the survivor's estate rather than the
original decedent's. This trust is relevant to couples where the estate of each spouse is significantly different, and
the estate of one will exceed the estate tax limitation. This trust allows a portion of the estate tax liability from the
larger estate to be shifted to the smaller, thus avoiding taxation.
QTIP stands for Qualified Terminable Interest Property. This is a IRS definition. Normally, on the death of one
spouse, it is the decedent's separate property and his or her share of the community property that is subject to the
estate tax at that time. The surviving spouses share of the community property and the surviving spouse's
separate property are not part of the decedent's estate.
It is possible to reduce the decedent's estate tax liability by leaving gifts outright to the surviving spouse. However,
assets held under directions specified by the decedent are still part of his estate even if there is an income benefit
provided to the surviving spouse for life.
QTIP is an IRS invention that allows a decedent, by meeting certain criteria, to leave an interest to the surviving
spouse, that terminates upon the survivors death, but will still be included in the survivor's estate rather than the
original decedent's. This trust is relevant to couples where the estate of each spouse is significantly different, and
the estate of one will exceed the estate tax limitation. This trust allows a portion of the estate tax liability from the
larger estate to be shifted to the smaller, thus avoiding taxation.
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