What is a qualified terminable interest property trust?
A qualified terminable interest property trust, or QTIP trust, is a special type of trust that is used in estate planning. It is a type of trust that is used to give an individual (the beneficiary) the right to receive certain assets from the trust upon a person’s death. QTIP trusts are set up in the state of West Virginia in order to ensure that the assets of an estate are distributed according to the wishes of the decedent. In a QTIP trust, the trustor, or person creating it, names a beneficiary, or person to receive the assets of the trust. The trustor may also leave instructions about how the assets should be distributed, such as whether they should be given outright or in installments. The trustor also controls the management of the assets, which includes decisions based on how to invest and manage the assets to the best benefit of the beneficiary. QTIP trusts are also beneficial in protecting assets from creditors, as well as shielding them from estate taxes. The trustor can also use the trust to provide for a surviving spouse in cases of divorce or death of a spouse. QTIP trusts are complex and must be properly established and managed in order to be effective. It is important to seek out the advice of a qualified estate planning attorney in order to make sure that the trust is properly created and managed to best suit the circumstances.
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