If you are one of the many people in Minnesota who wishes to make now the time you create or update your estate plan, you may wonder if a trust could benefit you and your family. When assessing this, you should educate yourself about the different types of trusts you may select from.
One form of trust, the qualified terminable interest property trust, helps people who wish to leave assets to multiple heirs. This trust may also be referred to as a QTIP trust.
Addressing the needs of different heirs
As explained by Policy Genius, a remarried spouse may find that a QTIP trust allows them to leave a legacy for their biological children and grandchildren while simultaneously ensuring their new spouse receives sufficient income to care for them during the rest of their life.
How a QTIP trust works
With a QTIP trust, a person titles asset under the trust. When that person passes away, the trust provides interest income to their surviving spouse. The core assets remain untouched. When the surviving spouse eventually passes away, the assets in the trust then flow to the other beneficiaries, often the first person’s children or grandchildren. The payment of estate taxes occurs not when the first person dies but after the surviving spouse dies.
This information is not intended to provide legal advice but is instead meant to give residents in Minnesota an awareness of the fact there are many types of trusts available to fit various needs and to give them an overview of one form of trust, the QTIP trust.