For Californians doing their estate planning, finding the best options that fit your family’s needs and unique circumstances can seem overwhelming. But that doesn’t mean you can keep putting off the inevitable.
For blended families where there are children from prior marriages or relationships, married partners might want to learn more about QTIP trusts and how they can protect assets.
Defining Qualified Terminable Interest Property trusts
Qualified Terminable Interest Property (QTIP) trusts are particularly useful for blended families who have been married to and had children with their former partners. It allows the surviving spouse from the relationship to enjoy the use of the estate and its resources during their lifetime.
But upon their death, those assets then revert back to the original spouse’s heirs and beneficiaries.
Why it works so well
QTIP trusts prevent the trust grantor’s heirs from impoverishing the surviving spouse at a time when they are grieving the loss of their loved one. Deaths, unfortunately, often bring out the very worst qualities in people.
QTIP trusts prevent any type of money grab from future heirs. They, in turn, won’t have to worry about their family’s wealth being passed out of their family line.
QTIP trusts avoid probate
Still another advantage of these types of trusts is that they are not subject to California’s probate regulations. That’s always a big boost for the eventual heirs and beneficiaries.
The downside to these (and many other kinds of trusts) is that QTIP trusts are irrevocable. That means that once the trust is funded and the beneficiaries named, these designations can’t be changed.
Learn more about your estate planning needs
If you face a complex estate planning issue, learning more about your options and the process can leave you well-positioned to make the best decisions about your estate.