Definitions for "Qualified Terminable Interest Property Trust"
A marital trust set up to avoid estate tax on the first spouse's death. Although the disposition of the property is determined under the terms of the trust establish by the deceased spouse, the value of the trust's assets are not subject to taxation until the surviving spouse's death. During his/her lifetime, the surviving spouse receives all income from the principal and, in some cases, has access to the principal.
allows an individual to provide a surviving spouse with income from the trust for the remainder of the spouse's lifetime. However, upon the death of the surviving spouse, the assets remaining in the trust pass to the beneficiaries named in the first decedent's will, most often, the children.
A terminable interest that will qualify for the marital deduction, if an appropriate election is made by the donor or executor. This type of vehicle is frequently used to avoid any transfer tax upon the death of the first spouse; it provides the surviving spouse with all income from the property (and access to the principal, under certain conditions) during his or her life, but it enables the deceased spouse to retain control over the ultimate disposition of the property.