A trust is a fiduciary relationship in which one party holds legal title to another's property for the benefit of a party who holds equitable title to the property. An inter vivos trust is a trust that becomes effective during the lifetime of the person creating the trust (the settler or trustor).
A qualified terminable interest property trust, often referred to as a "QTIP" trust, allows a bequest to a spouse in trust that, after a proper election by the beneficiary spouse, qualifies for the unlimited marital deduction:
" if the beneficiary spouse is entitled to all of the income from the trust property,
" if the income is payable annually or at more frequent intervals, and
" if no person, including the beneficiary spouse, has the power to appoint any part of the qualifying property to any person other than the beneficiary spouse during the beneficiary spouse's lifetime.
In order that the property transferred to a surviving spouse by means of an inter vivos marital deduction trust qualify for the marital deduction, the property must be includible in the trustor's gross estate for federal estate tax purpose.
A Florida Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death is a type of trust that allows the donor to transfer assets to their spouse during their lifetime while maintaining control over the ultimate distribution of the assets to their children upon their spouse's death. This type of trust is often used in estate planning to provide for both the spouse and the children of the donor. In a Florida Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death, the donor creates a trust and transfers assets into it during their lifetime. The trust is irrevocable, meaning that once assets are transferred into the trust, they can no longer be taken aback by the donor. The donor names their spouse as the primary beneficiary of the trust during their lifetime, ensuring that the spouse will have access to the assets and any income generated by the trust. Upon the death of the spouse, the remaining principal of the trust is then distributed to the donor's children, as specified in the trust document. This ensures that the assets ultimately pass to the donor's children, rather than being distributed according to the spouse's wishes or potential remarriage. There are different types of Florida Inter Vivos TIP Trusts, and they can be tailored to meet the specific needs and goals of the donor. These may include: 1. Traditional TIP Trust: This type of trust provides income to the surviving spouse for their lifetime, with the principal passing to the donor's children upon the spouse's death. 2. Limited TIP Trust: In this variation of the trust, the surviving spouse may receive both income and a limited amount of principal from the trust during their lifetime. The remainder of the principal is distributed to the donor's children on the spouse's death. 3. Power of Appointment TIP Trust: This variation allows the surviving spouse to have some control over the ultimate distribution of the assets upon their death. They may have the power to appoint the principal to their children, other family members, or even charities. A Florida Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death serves as a powerful tool in estate planning, allowing the donor to provide for their spouse's financial well-being while also ensuring that their children are ultimately provided for. Consulting with an experienced estate planning attorney is crucial to establish a trust that aligns with individual circumstances and achieves the desired goals.
