What is a New York QTIP Trust?www.myestateplan.com 1

“In an estate planning context, the acronym QTIP stands for a qualified terminable interest property trust. This type of

trust can be useful if you have children from a previous marriage and you want to get remarried.”

WHAT IS A NEW

YORK QTIP TRUST?

MARK S. EGHRARI NEW YORK ESTATE PLANNING ATTORNEY

What is a New York QTIP Trust?www.myestateplan.com 2

In an estate planning context, the acronym QTIP stands for a qualified

terminable interest property trust. This type of trust can be useful if you have

children from a previous marriage and you want to get remarried.

If you simply leave most of your property to your spouse, you have no way of

knowing if your spouse will provide for your children adequately if you die first.

With a qualified terminable interest property trust, you can make sure that your

children are provided for come what may.

Let's look at the details.

DUAL OBJECTIVES

When you are planning your estate as a married person with children from a

previous marriage, you want to protect the interests of your children, but you also

want to make sure that you provide for your spouse adequately. This is where a

qualified terminable interest property trust can be beneficial.

You fund the trust, and you name a trustee to administer the trust after you pass

away. Many people will use a corporate trustee such as a trust company or the

trust department of the bank. When you use a professional fiduciary, you can be

certain that the trust is managed in accordance with industry standards, and

there is inherent oversight.

Your spouse would be the life beneficiary of the trust, and your children would be

the final beneficiaries. If you do in fact predecease your spouse, the trustee could

distribute the earnings from the trust to your spouse throughout the rest of his or

her life. This would satisfy one of your estate planning objectives.

What is a New York QTIP Trust?www.myestateplan.com 3

Plus, your spouse could continue to use property that was conveyed into the

qualified terminable interest property trust. For example, if you convey your

home into the trust, your spouse could remain in the home as usual after your

passing. However, your spouse would not have the ability to sell the home or

transfer ownership.

Throughout his or her life, your surviving spouse would not be able to change the

final beneficiaries. After the passing of your spouse, the assets that remain in the

trust would become the property of your children.

As you can see, when you create a qualified terminable interest property trust,

you cover all of your bases.

What is a New York QTIP Trust?www.myestateplan.com 4

FAMILY HARMONY

The pragmatic,

tangible benefits

that you would

gain through the

utilization of a

QTIP trust are self-

evident. However,

on a more subtle

level, you can

maintain harmony

if you use this type

of trust as part of your estate plan.

Under other circumstances, there can be underlying tensions during the life of

your surviving spouse. Your children may have concerns, and if you leave your

children significant assets outright immediately after your passing, your

surviving spouse could harbor hard feelings.

SUMMARY

During our current era, divorces are very common. Statistics vary depending on

the sources, but somewhere between 40 and 50 percent of marriages end in

divorce. Second and third marriages fail with greater frequency. This is a stark

reality that you should understand when you are making financial decisions.

Most married people have children, so a divorce can create some estate planning

challenges. Parents who are remarrying want to take care of their spouses, but

What is a New York QTIP Trust?www.myestateplan.com 5

they also want to make sure that their children receive their inheritances.

A qualified terminable interest property trust can provide a solution in many

cases. These trusts are alternately referred to as QTIP trusts.

When a qualified terminal interest property trust is in place, the surviving spouse

would be able to receive income from the trust throughout his or her life. The

survivor would also be able to utilize property that was conveyed into the trust.

However, the surviving spouse would not control the property.

In the trust declaration, the children would be named as the final beneficiaries.

The surviving spouse could make no changes to the beneficiary designations.

After the death of the surviving spouse, the children would inherit the assets that

remain in the trust.

If you would like to learn more about estate planning for single parents who are

remarrying, schedule a consultation with a licensed estate planning attorney.

REFERENCES

Duke University

http://personalfinance.duke.edu/glossary-term/qualified-terminable-interest-property-qtip-trust Investopedia http://www.investopedia.com/terms/q/qtip.asp

Nolo

http://www.nolo.com/legal-encyclopedia/qtip-trusts.html

What is a New York QTIP Trust?www.myestateplan.com 6

About the Author

Mark S. Eghrari

Mark S. Eghrari is an attorney in private practice in Smithtown, New

York. He has been in practice since 1988. Mark S. Eghrari provides

extensive estate and tax planning services to individuals and

businesses. Mr. Eghrari’s primary focus is helping clients avoid

probate, minimize or eliminate Federal and State Estate taxes and

protect their assets from the high cost of nursing care, if they become

ill. Mr. Eghrari’s expertise is in providing unique and innovative

estate planning solutions that create a secure future for his clients and their loved ones. Mr.

Eghrari is a member of the American Bar Association and New York State Bar Association as

well as the National Academy of Elder Law Attorneys and the American Academy of Estate

Planning Attorneys.

Mr. Eghrari completed his undergraduate work at Lafayette College in Easton, Pennsylvania

and received his MBA in banking and finance from Hofstra University on Long Island. He

earned his Juris Doctorate from the Hofstra University School of Law, where he was a member

of the Law Review. While in law school, Mr. Eghrari gained practical experience in the

corporate tax department of Citicorp in New York city.

Mark S. Eghrari and Associates PLLC www.myestateplan.com 50 Karl Avenue, Suite 202 Smithtown, NY 11787 Phone: (631) 265-0599 Fax: (631) 265-0754