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.
Description: A Maryland Inter Vivos TIP (Qualified Terminable Interest Property) Trust with Principal to Donor's Children on Spouse's Death is a specialized type of trust established in the state of Maryland. This unique trust structure allows the donor to provide for their surviving spouse during their lifetime while ensuring that the principal of the trust ultimately passes on to the donor's own children after the spouse's death. In simple terms, this trust enables the donor to establish a plan for the distribution of his or her assets, ensuring that both the spouse and children are taken care of in the future. It can serve as a valuable estate planning tool, particularly for individuals who have children from a previous marriage or want to protect their assets for future generations. This type of trust offers several benefits, including providing for the financial needs of the surviving spouse, preserving the principal for the donor's children, maximizing tax advantages, and potentially avoiding probate. The trust is established during the lifetime of the donor, and specific provisions are put in place to ensure that the spouse receives income from the trust for their lifetime. Different types of Maryland Inter Vivos TIP Trusts with Principal to Donor's Children on Spouse's Death may include variations in the terms and conditions set forth within the trust. These could be customized to meet the specific needs and wishes of the donor, such as determining the frequency or amount of income distributions to the surviving spouse, specifying the beneficiaries of the principal after the spouse's death, or incorporating provisions for potential contingencies or changes in circumstances. It's essential to consult with an experienced estate planning attorney in Maryland to understand the legal requirements and options available when setting up a Maryland Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death. They can guide individuals through the process, ensuring that the trust is properly drafted and executed in accordance with the state's laws, and provide valuable insights to meet individual goals and protect the financial well-being of loved ones.
