Establishing a trust could be an effective way of managing your Texas estate. That said, depending on your situation, some trusts are more beneficial than others. A qualified terminable interest property (QTIP) trust has a few distinct advantages, especially for married couples.
Protecting a surviving spouse
After you pass away, your surviving spouse will deal with many challenges. Often, surviving spouses deal with financial challenges from going from two incomes to one or none at all. Fortunately, a QTIP trust ensures that your spouse has lifelong income.
Taking care of beneficiaries
Besides your spouse, you likely have other loved ones you want financially taken care of. For some people, these individuals are children. Other people may have surviving parents or siblings. Regardless of who your beneficiaries are, having a QTIP trust also lets you leave behind assets for these people. Also, a QTIP trust protects your left-behind assets from going to another person or family if your spouse remarries.
A goal of estate planning for some is to reduce taxes. Establishing a QTIP trust defers federal estate taxes for your surviving spouse. After your surviving spouse passes away and your estate is worth enough to trigger it, an estate tax goes into effect.
Not worrying about unwanted changes
Another potential benefit of a QTIP trust is that it’s irrevocable. Once created, you or anyone else can’t change the trust. This situation is beneficial if you suspect your spouse may alter your trust or try to access your trust’s principal.
Life is full of uncertainties. A trust can help protect those you love, especially from financial unpredictability.