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: Vermont Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death A Vermont Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death, also known as a Qualified Terminable Interest Property Trust, is a type of trust established during the lifetime of the donor (also referred to as the granter or settler). This trust offers specific benefits and provisions for the distribution of assets upon the death of the donor's spouse. In this particular type of trust, the principal assets are set aside for the donor's children, only to be transferred to them once the spouse passes away. The trust is designed to ensure that the spouse has the necessary financial support during their lifetime, while also protecting the donor's children's inheritance. By utilizing this trust, the donor can maintain control over the ultimate distribution of their assets, ensuring that their children are beneficiaries after their spouse's death. This type of trust can offer various tax benefits, including estate tax deductions, which can help minimize tax liabilities and preserve more wealth for future generations. There may be different versions or variations of the Vermont Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death, based on specific circumstances and individual needs. Some variations include: 1. Revocable Vermont Inter Vivos TIP Trust: This type of trust allows the donor to modify or revoke the trust during their lifetime. It provides flexibility in managing the trust assets and adjusting beneficiaries if necessary. 2. Irrevocable Vermont Inter Vivos TIP Trust: Unlike the revocable version, an irrevocable trust cannot be modified or revoked once established. This type of trust offers additional asset protection since the assets are no longer considered part of the donor's estate. 3. Charitable Vermont Inter Vivos TIP Trust: This variation includes provisions for charitable beneficiaries, allowing the donor to support causes or organizations of their choice while ensuring their children's interests. 4. Testamentary Vermont Inter Vivos TIP Trust: Instead of being established during the donor's lifetime, this type of trust is created through the donor's will and takes effect after their death. It accomplishes similar goals but provides additional flexibility for estate planning purposes. In conclusion, the Vermont Inter Vivos TIP Trust with Principal to Donor's Children on Spouse's Death is a powerful estate planning tool that allows donors to protect and control the distribution of their assets. Depending on individual circumstances, there are various types and variations of this trust that can be tailored to meet specific needs and objectives. It is recommended to consult with an experienced estate planning attorney to determine the most suitable option for your unique situation.
