* For larger estates, a Clayton Contingent
QTIP provision [(Estate of Clayton v.
If the decedent leaves property to a surviving spouse for the spouse's lifetime, with a remainder interest to children, the transfer would not qualify for the marital deduction; however, a
QTIP does qualify for the marital deduction.
2056(b)(7) provides an exception--the terminable interest rule does not apply to a
QTIP.
As noted above, the TPT credit will probably only be more advantageous than a full
QTIP election marital deduction when the transferred property is included in the TPT credit calculation but not in the gross estate of the transferee spouse.
A
QTIP trust allows the creator (grantor) to provide funds for a surviving spouse and also name the final beneficiaries.
The surviving spouse could disclaim her income interest in the
QTIP trust created by the first-to-die spouse.
In his illustration, a decedent left her surviving spouse assets in a marital
QTIP trust.
A
QTIP trust allows the surviving spouse to receive income from the trust's assets for life but the principal goes to someone else, usually the children.