California Estate Planning: What Is a QTIP Trust?

Attorney Image By: James Filippi
California Estate Planning What Is a QTIP Trust image

California Estate Planning: What Is a QTIP Trust?

Estate planning is an essential process that ensures your assets are distributed as you desire when you pass away. A Qualified Terminable Interest Property (QTIP) Trust can be an incredible tool if it fits your wishes and your family’s situation. A QTIP Trust provides married couples with a strategic way to protect their assets and take care of their loved ones. In this article, we’ll explore the intricacies of QTIP trusts, what they are, when and why you might need one, their advantages and drawbacks, and the importance of consulting with a knowledgeable estate planning lawyer. We’ll also discuss QTIP rules and provisions to shed light on their added flexibility.

What is a QTIP Trust?

A QTIP trust is a type of irrevocable trust used in estate planning. It enables one spouse to provide for the financial security of the surviving spouse while ultimately benefiting the beneficiaries who will inherit the trust’s assets upon the passing of the second spouse.

Instances to consider a QTIP trust

If you want to provide for your surviving spouse but also have specific plans for the distribution of assets after both of you have passed away, you might want to think about setting up a QTIP trust. Common situations include:

  1. Second marriages and blended families: if you are in a second or subsequent marriage and want to ensure your children from a previous marriage receive a fair share of your estate while providing for your current spouse.
  2. Complex family dynamics: A QTIP trust can help maintain control over the distribution of assets to protect vulnerable beneficiaries in families with intricate dynamics.
  3. Estate Tax Deferral: One of the primary benefits of a QTIP trust is that it allows a spouse to pass assets to their surviving spouse without incurring estate taxes upon the first spouse’s death. This defers the estate tax until the second spouse’s death, potentially preserving more wealth for the family.

Why choose a QTIP trust?

The main factor to consider in a QTIP trust is control. This trust allows you to secure your spouse financially while still controlling who will receive the assets after your spouse passes away. It gives you peace of mind by ensuring that your wishes are carried out without putting your spouse in a vulnerable financial situation.

Benefits of a QTIP trust:

  1. Spousal support: your surviving spouse is entitled to income generated by the trust during their lifetime, ensuring their needs are taken care of.
  2. Control: You can retain control over the distribution of your assets and protect your wishes for your beneficiaries after your spouse’s passing.
  3. Tax efficiency: QTIP trusts can be an effective estate tax planning tool, possibly lowering the tax burden on your estate.

Drawbacks of a QTIP trust

  1. Irrevocable: A QTIP trust is generally irrevocable once it is established. This means it cannot be easily changed or dissolved, so careful planning is necessary.
  2. Complexity: Establishing and running a QTIP trust can be challenging and complicated, requiring both financial and legal expertise.
  3. Limited access: the surviving spouse typically only has access to the income generated by the trust but can utilize principle assets for health, education, maintenance, or support expenses.

QTIP subtrusts and provisions

Subtrusts and provisions can be added to QTIP trusts to further tailor them to address specific needs. These subtrusts might permit beneficiaries to receive distributions at their discretion, pay for children’s education, or shield assets from creditors. Additionally, provisions can be added to adapt to changing conditions, ensuring that your trust remains effective and relevant.

Consult with an estate planning attorney in Rocklin.

It’s important not to take the decision to create a QTIP trust lightly. It’s essential to consult with an experienced estate planning lawyer in Rocklin who can examine your particular circumstances and advise you on whether a QTIP trust is the best option for you. Additionally, an attorney can help you navigate the complexities of creating and managing a trust so that it aligns with your goals.

A QTIP trust is a powerful estate planning tool that can help you provide for your surviving spouse while retaining control over how your assets are distributed. Benefits such as spousal support and tax efficiency make it a desirable option. However, its complexity and irrevocable nature require careful consideration and expert guidance. An estate planning lawyer can create a QTIP trust that meets your specific needs and goals for your family’s financial future.

Filippi Law Firm, P.C., provides legal services in estate planning, probate, trust administration, trust litigation, and personal bankruptcy in the greater Sacramento area, with a focus in Rocklin, Roseville, Lincoln, and Granite Bay. Give us a call at (916) 333-7910 or fill out the contact form to get in touch with our office. Consultations are free, and they can be done over the phone, via Zoom, or in person at our office in Rocklin.

Satisfied Client Stories


Was going in for heart surgery in a week and needed an Estate Plan ASAP! Jennifer and the staff at Filippi Law Firm managed to put together my plan, which was rather extensive, within that time frame. This gave me the peace of mind I needed in case the worst happened. Luckily it wasn’t need but I now have it in case I ever do. Great staff and wonderful to work with. Wouldn’t go to anyone else. Would give 10 stars if I could.

Matthew S. | Antelope, CA

We recently relocated from the Bay Area and wanted to update our over-25-year-old Living Trust. He did an outstanding job. He also gave us some contacts in Texas to update some property we own there.

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Patient and caring and trustworthy are the best words to describe the service my husband and I received. We highly recommend this law firm.

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I highly recommend Filippi Law Firm. Katia, is extremely genuine very helpful. Great communication from beginning to end. We will work with this law office again. Thanks, team!

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