| A second marriage or relationship question…..read on:
CLIENT QUESTION:
Can a QTIP be used to protect the assets I leave to my significant other from being inherited by her children?
MY RESPONSE:
Forget the term QTIP trust, it is misleading, because it is more of a tax concept than anything else. Forget that term for now.
What you are really asking is whether some type of trust may be needed to protect your assets from your second spouse or significant other. The answer is that a trust may be very appropriate. The bottom line is that once you are dead and leave your assets to your second spouse or significant other, YOU HAVE LOST CONTROL. The assets are no longer yours. It is their assets now and they can do anything they want with them. This may include leaving it to your children later…or theirs…or a combination…or their next spouse…you get the idea.
Instead, many of my clients leave their assets in a trust for the benefit of their second spouse (or significant other). In such cases, the surviving spouse (or significant other) can enjoy the assets while they are living, but upon their death, your trust will dictate where those assets go, probably back to your children.
This is not always the best plan, but it is very popular. The facts and circumstances of every case will be different, but it is something to always consider.
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Stay safe! |
