Qualified Terminable Interest Property (QTIP) Trust Template

What Is the QTIP Trust Template?

A Qualified Terminable Interest Property Trust qualifies for the federal estate tax marital deduction while allowing you to control ultimate distribution of trust assets. Your surviving spouse receives all trust income for life and may receive principal at the trustee's discretion. When your spouse dies, remaining assets pass to beneficiaries you designate—typically your children—not to people your spouse might choose. This structure matters primarily in second marriages where you want to provide for your spouse without disinheriting your children from a previous marriage.

The QTIP election defers estate taxes until your spouse's death rather than paying them immediately at your death. Your executor chooses whether to make the election based on estate tax calculations at your death, preserving flexibility for optimal tax planning. The trust must distribute all income to your spouse quarterly and cannot benefit anyone else during your spouse's lifetime to maintain marital deduction qualification.

 

 

Is This QTIP Trust Right for You?

You need this trust if you're:

• Providing for your spouse while ensuring children from a previous marriage inherit
• Deferring estate taxes until your spouse's death through marital deduction
• Controlling who inherits trust assets after your spouse dies
• Balancing spousal support with protecting inheritance for your children
• Creating mandatory income distributions to your spouse with discretionary principal access
• Planning for blended family situations with children from multiple marriages

You definitely need this trust if:

• You're remarried and want to provide for your spouse without disinheriting your kids
• You need marital deduction qualification while controlling ultimate beneficiaries
• Your attorney quoted $4,000-$8,000 to draft a QTIP trust
• You're establishing mandatory income distributions combined with controlled inheritance
• You want estate tax deferral while preventing your spouse from redirecting assets

 

 

Why Thousands Trust Legal GPS Templates

Save Money: Attorneys charge $4,000-$8,000 to draft QTIP trusts. This template costs $35.

Save Time: Download immediately and complete in under three hours versus waiting weeks for attorney drafting.

Look Professional: Courts and financial institutions recognize attorney-quality marital deduction language and trust provisions.

Keeps You Out of Court: Mandatory income distribution provisions, no-power-to-appoint restrictions, and marital deduction qualification language prevent IRS challenges and family disputes over trust administration.

 

 

 

Get Protected in 3 Simple Steps

Step 1: Secure Checkout

Complete your purchase through our encrypted payment system. Your template downloads immediately.

Step 2: Instant Download

Receive your attorney-drafted QTIP trust template in Microsoft Word format, ready for customization.

Step 3: Fill In the Highlighted Fields

Follow the bracketed guidance to establish mandatory income distribution terms, select discretionary principal distribution standards, name your trustee and successors, grant or withhold power of appointment, and designate remainder beneficiaries. Consult with an estate planning attorney to review your completed trust, ensure proper execution and funding, coordinate with your will and overall estate plan, and verify marital deduction qualification.

 

Frequently Asked Questions

Can I use this template multiple times?

Yes. Your purchase includes unlimited use rights. Create QTIP trusts for different situations, modify terms for changed circumstances, or use the structure for similar marital deduction planning. Most families create one QTIP trust as part of their overall estate plan, though some situations involve multiple trusts for different asset categories or planning objectives.

Is this trust legally binding?

Yes. This template uses the same legal language and structure estate planning attorneys use when drafting QTIP trusts for clients. Courts, financial institutions, and the IRS recognize properly executed QTIP trusts as legally enforceable marital deduction vehicles. Because QTIP trusts have significant federal estate tax implications, consult an estate planning attorney to review your completed trust, ensure marital deduction qualification requirements are met, coordinate with your executor regarding the QTIP election, and verify proper trust funding and administration.

Does my spouse have to receive all trust income?

Yes. Mandatory income distribution to your spouse at least quarterly is an absolute requirement for marital deduction qualification under Section 2056(b)(7). The trust cannot accumulate income. This requirement is not discretionary—if the trustee fails to distribute all income, the trust loses marital deduction qualification and triggers immediate estate tax liability. Your spouse receives all income automatically; principal distributions remain discretionary based on the standard you select.

Can my spouse serve as trustee of their own QTIP trust?

Yes, with restrictions. If your spouse serves as sole trustee, their authority to distribute principal to themselves is limited to ascertainable standard distributions (health, education, maintenance, support) regardless of any broader discretionary authority granted in the trust. Alternatively, your spouse can serve as co-trustee with an independent trustee who makes all distribution decisions affecting your spouse. The template includes provisions for both structures. If you want wholly discretionary principal distribution authority without ascertainable standard limitations and want your spouse involved in trust administration, use the co-trustee structure with an independent decision-maker for spousal distributions.

What happens to trust assets when my spouse dies?

Trust assets pass to remainder beneficiaries you designate in the trust agreement. Your spouse cannot redirect assets to their new family, creditors, or anyone you didn't specify. You may grant your spouse a limited power of appointment allowing them to adjust distribution among your descendants (typically your children), but they cannot appoint assets outside the class of beneficiaries you designate. If your spouse doesn't exercise any granted power, or if you don't grant one, assets pass according to your default distribution provisions—typically to your children either outright or in continuing trusts.

How does a QTIP trust differ from a regular revocable living trust?

A revocable living trust provides probate avoidance and incapacity planning but typically gives your spouse complete control after your death—your spouse can change beneficiaries, spend principal freely, or redirect assets entirely. A QTIP trust limits your spouse to receiving mandatory income and discretionary principal based on standards you establish, with remainder beneficiaries locked in by you, not changeable by your spouse. The QTIP qualifies for estate tax marital deduction while maintaining control over ultimate distribution. Revocable trusts prioritize flexibility and spousal control; QTIP trusts prioritize controlled inheritance for specific beneficiaries while still qualifying for marital deduction benefits.

When does the QTIP election happen?

Your executor makes the QTIP election on your federal estate tax return after your death, not when you create the trust. The executor can elect QTIP treatment for all trust property, a specific dollar amount, or a specific fraction based on estate tax calculations at your death. This post-death flexibility allows optimal tax planning based on actual circumstances—exemption amounts, total estate size, and your spouse's financial situation. The trust document establishes the structure that allows QTIP election, but the actual election happens later when your executor files your estate tax return within nine months after your death.

Do I need income-producing assets in a QTIP trust?

Yes. The trust must distribute all income quarterly, which means assets must produce income. Growth stocks with no dividends, cryptocurrency, undeveloped land, and other non-income-producing assets are problematic in QTIP trusts. You must either sell non-producing assets and reinvest in income-producing property, or authorize unitrust treatment (if your state allows it) where the trust distributes a fixed percentage of asset value annually rather than actual income. The template includes optional unitrust conversion provisions. Discuss asset selection with your estate planning attorney to ensure the trust can meet mandatory income distribution requirements.