Qualified Terminable Interest Property (QTIP) Trust

Definition

A [wex:trust] that qualifies for the [wex:marital deduction]. A qualified terminable interest property trust ("[wex:QTIP trust]") allows a spouse to give a [wex:life estate] in property to his or her spouse without incurring the [wex:federal gift tax]. The donee (recipient) spouse has an income interest in the trust and does not have a [wex:power of appointment] over the [wex:principal]. Upon the donor spouse's death, the principal is included in his or her estate for [wex:estate tax] purposes. 

Illustrative caselaw

See, e.g. Wells Fargo Bank New Mexico, N.A. v. United States, 319 F.3d 1222 (10th Cir. 2003).

See also

  • [wex:Qualified domestic trust]

  • [wex:Estates and trusts]

 

 

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