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 Massachusetts Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death is a specific type of trust that is established during the lifetime of the donor (also referred to as the granter or settler) in the state of Massachusetts. This trust provides certain benefits and protections for the donor's spouse and children upon the donor's death. The primary purpose of this trust is to ensure that the surviving spouse is provided for financially while also protecting the interests of the donor's children. The trust is often used as a means to manage the distribution of the donor's estate to maximize tax benefits and minimize potential conflicts among beneficiaries. A distinguishing feature of a Massachusetts Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death is that the principal of the trust, meaning the assets and property held within, are ultimately distributed to the donor's children upon the death of the surviving spouse. This ensures that the donor's children receive their intended share of the estate while still allowing the surviving spouse to benefit from the trust's income and other designated provisions during their lifetime. Different types or variations of this trust may include: 1. Massachusetts Inter Vivos TIP Trust with Income to Spouse and Remainder to Donor's Children: This type of trust allows income generated by the trust's assets to be distributed to the surviving spouse while the principal is preserved for the donor's children. Upon the death of the surviving spouse, the remaining principal is then transferred to the donor's children. 2. Massachusetts Inter Vivos TIP Trust with Power of Appointment: This variation provides the surviving spouse with the power to determine how the trust's assets will be distributed among the donor's children upon their death. This allows the surviving spouse more flexibility and control in allocating the assets. 3. Massachusetts Inter Vivos TIP Trust with Charitable Remainder: In this trust, a portion of the trust's income or principal is designated for charitable purposes upon the death of the surviving spouse. The remaining assets are then distributed to the donor's children. It is important for individuals considering establishing a Massachusetts Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death to consult with an experienced estate planning attorney to ensure that the trust is structured to meet their specific goals and comply with applicable laws and regulations.
