No two estate plans are ever the same. At least that's what most estate planning experts will tell you. That's because an estate plan should be as unique as the individual drafting it. It should really reflect a person's life events - such as having children or remarriage - and what they want to happen to their estate when they pass.
Whether you realize it or not, there are a number of estate planning tools at your disposal that can ensure you are accounting for all of your major life events and your end-of-life wishes. One such tool is a qualified terminable interest property trust, or QTIP for short.
Although the word QTIP usually conjures images of the little wipe swabs used to clean one's ears, a QTIP in the estate planning world is a valuable tool a grantor, the person setting up the trust, can use to provide for a surviving spouse as well as their beneficiaries.
Now, you may be wondering: who uses QTIPs? Generally, QTIPs best serve people who have children from a first marriage but are now remarried. A QTIP partitions a grantor's estate so that his or her surviving spouse is financially taken care of and retains the family home while also ensuring that their beneficiaries, such as their children from their first marriage, receive an inheritance.
Whether you think you need a QTIP or not, it's always best to talk to someone with extensive knowledge in estate planning, such as an attorney with experience setting up trusts. The laws surrounding estate planning and probate differ from state to state, meaning what is allowed in one state may not be allowed in another.
Talking to an estate planning expert can help you understand the applicable laws in your area as well as help you determine if a QTIP is the right tool for your estate plan.