Years ago, when you created your estate plan, the federal gift and estate taxes may have been the last thing on your mind. When your attorney shared the numbers with you they seemed so high that they were laughable. You never expected to have enough money to have to think about estate and gift taxes, but your smart financial and business decisions have paid off. What seemed laughable in your youth is now a real concern for your family’s future.
Consider a QTIP to Maximize the Money Maintained by Your Family
A Qualified Terminable Interest Property (QTIP) trust allows you to coordinate your estate planning with that of your spouse. If you die before your spouse, then pursuant to a QTIP trust, your spouse will receive income interest from the trust during his or her lifetime and then the trust property will go to the named beneficiary. This may have important tax considerations for your family. It may also be important if you have children from another marriage or other beneficiaries that are not included in your spouse’s estate.
Don’t Set up a QTIP Alone
A QTIP is only effective if it is created properly. If the trust does not meet all of the requirements then it might not have the effect that you want it to have. Accordingly, it is important to talk to an experienced estate planning lawyer about your estate planning goals and about QTIP trusts specifically. Then, if you decide to establish a QTIP trust, your lawyer can help you do it in such a way that is legally binding and help accomplish your goals.