A QTIP trust does which of the following?

A QTIP trust does which of the following?

• A. Allows the testator to appoint beneficiaries after death of surviving spouse.
• B. Gives the spouse only a limited testamentary power of appointment.
• C. Allows the spouse an unlimited right of withdrawal.
• D. Allows the spouse an inter vivos right to appoint $100,000 per year.

Answer: (A)

A QTIP trust is used to let the surviving spouse receive income for life while the person who created the trust keeps control over who will ultimately receive the trust assets after the spouse dies. The key feature is that the testator can designate the beneficiaries who will receive the remaining trust property once the surviving spouse passes away. That’s exactly what this option describes. The other ideas don’t fit the typical QTIP setup. The surviving spouse doesn’t gain a broad or unlimited power to appoint the remainder to anyone they choose; the decedent’s instructions govern the ultimate beneficiaries. It isn’t an arrangement that gives the spouse an unrestricted right to withdraw or to make annual inter vivos appointments of fixed amounts.

A QTIP trust is used to let the surviving spouse receive income for life while the person who created the trust keeps control over who will ultimately receive the trust assets after the spouse dies. The key feature is that the testator can designate the beneficiaries who will receive the remaining trust property once the surviving spouse passes away. That’s exactly what this option describes.

The other ideas don’t fit the typical QTIP setup. The surviving spouse doesn’t gain a broad or unlimited power to appoint the remainder to anyone they choose; the decedent’s instructions govern the ultimate beneficiaries. It isn’t an arrangement that gives the spouse an unrestricted right to withdraw or to make annual inter vivos appointments of fixed amounts.