What is a qualified terminable interest property trust?
A qualified terminable interest property trust (QTIP) is a type of trust available under Arkansas inheritance law. A QTIP trust is a special type of trust designed to protect the financial assets of a deceased spouse. The trust allows the surviving spouse to have access to and use of the assets, but it also provides protection for those assets in the event of the surviving spouse’s death. When someone dies, assets are distributed according to their wishes, or, if they had no will, according to the laws of intestate succession. A QTIP trust allows the deceased spouse to specify who will receive the assets upon his or her death. The trust also prevents the surviving spouse from accessing the assets, and requires that the assets be given to the named beneficiaries upon the surviving spouse’s death. In addition to providing protection for the assets, a QTIP trust also offers tax benefits to the beneficiaries. In some cases, the tax burden associated with the trust is lessened, because the assets in the trust are not subject to estate taxes upon the surviving spouse’s death. In summary, a qualified terminable interest property trust is a type of trust available under Arkansas inheritance law that is designed to protect the financial assets of a deceased spouse while providing tax advantages to the beneficiaries. The trust allows the surviving spouse to have access to and use of the assets, but it also ensures that the assets will go to the named beneficiaries when the surviving spouse passes away.
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