You might have heard about marital trust with the name of “A Trust.” So, what exactly is a marital trust?
It is a type of Irrevocable Trust that holds the deceased spouse’s assets that transcend the amount that can be sheltered from death taxes.
Let’s learn how marital trust works.
The Purpose of a Marital Trust
Marital trusts are created to shelter the deceased spouse’s property that exceeds the amount allowed for being protected from death taxes.
Three Types of Marital Trusts
Marital trusts are further divided into three trusts, as explained below.
Qualified Domestic Trusts (QDT)
There is not much restriction if both the spouses are in the United States. The surviving spouse is not required to pay taxes on the property owned by the deceased spouse.
However, if one of the spouses resides outside the United States, Qualified Domestic Trust (QDT) does the work.
Qualified Personal Residence Trust (QPRT)
These trusts are created to benefit the estate after the demise of the trust creator. How QPRT works is that it removes the assets and reduces the potential estate taxes that will results after the creator passes away.
Qualified Terminable Interest Property Trust (QTIP)
QTIPs provide greater asset control. These are often created in combination with living trusts and can shelter any additional assets the couple owns.
Qualified terminal interest property trusts are created at the time of a person’s death, and thus the property, higher in amount than the personal exemption, is placed under QTIP.
A Knowledgeable Attorney is a Solution
We have got you covered if you are going through a similar phase or witnessing a loved one going through any state of confusion.
Fortunately, a knowledgeable estate planning attorney can do the work for you. Contact Keystone Asset Protection and Estate Planning today and choose the best for yourself.