The problem a QTIP solves shows up constantly in second marriages. You want your surviving spouse provided for, and you want your children from a first marriage to inherit eventually, and you do not want the second outcome to depend on your spouse's future decisions or a new relationship.
The trust splits those interests. Your spouse must receive all the income for life and is the only permitted beneficiary during that time, which is what qualifies the trust. But you name the remainder beneficiaries in your own document, and your spouse cannot change them. Support without redirection.
It also qualifies for the marital deduction, so property passing into it is generally not taxed at the first death, with taxation deferred until the surviving spouse dies. That treatment requires an election made on the estate tax return, and the trust must meet strict requirements, so the drafting and the filing have to line up precisely.
The tension in practice is between the spouse and the remainder beneficiaries. The spouse wants income now, the children want the principal preserved. A trustee caught between them faces genuinely conflicting duties, which is a strong argument for an independent trustee rather than either side of the family.
Frequently asked
- Can my spouse spend the principal?
- Only to the extent the trust permits, and the choice is yours at drafting. Income must go to the spouse, but access to principal can be barred entirely, allowed for defined needs like health and support, or left to trustee discretion. Tighter restrictions protect the remainder beneficiaries and create more risk that the spouse's actual needs go unmet. Where that balance sits is the central decision in writing one.
- Can my spouse redirect the assets to their own children?
- No, and that is the core reason the structure exists. Remainder beneficiaries are fixed by you and your surviving spouse has no power to change them, whether they remarry, fall out with your children, or simply form other intentions. An outright gift to a spouse carries no such protection: once it is theirs, it goes wherever their own estate plan sends it.
- Who should be trustee of a QTIP in a blended family?
- Rarely a family member from either side. A surviving spouse as trustee has an incentive to favour income; a child from a first marriage as trustee has an incentive to preserve principal. Either choice puts someone in an impossible position and invites accusations of self-dealing. An independent professional or corporate trustee costs money but removes the conflict, which in blended families is usually money well spent.