Written by: Joanna Adu, Esq.
For individuals who are married but have children from a prior relationship a QTIP Trust should be a point of consideration in your estate planning process. A QTIP Trust, or Qualified Terminable Interest Property Trust, is an irrevocable trust that allows you to use your assets to provide for your surviving spouse until his or her death while still preserving those assets for distribution to your children thereafter. Under a QTIP Trust, your surviving spouse has limited access to the trust assets in that he or she may receive income derived from the trust assets, or a small annual percentage of the trust assets, but does not have authority to withdraw the principal assets or change the disbursement of the assets as established by the trust.
Why might placing my assets in a QTIP Trust be more beneficial to me? If your surviving spouse remarries after your death and he or she has directly inherited your assets upon your death, those assets may be transferred to the new spouse or other subsequent children instead of to your children as you intended. Placing your assets into a QTIP Trust assures that your assets pass on to your children upon your surviving spouse’s death. Further, a QTIP trust can help limit applicable federal gift and estate tax by utilizing the marital deduction without having to give full ownership to the surviving spouse.
Somerville Family Law Lawyers at Lyons & Associates, P.C. Assist Blended Families with QTIP Trusts
If you would like to learn more about QTIP Trusts or discuss other estate planning matters the knowledgeable Somerville family law lawyers at Lyons & Associates, P.C. are available to speak with you. We invite you to submit an online inquiry form or give us a call at our office at 908-575-9777 to schedule a private consultation. We serve clients from the surrounding areas, including Somerset, Woodbridge, Morristown, Parsippany, Rockaway, Short Hills, Chatham, Randolph, Madison, and Morris Plains.