QTIP Marital Trust

Course: Estate Planning
Lesson 10: Application of Estate Planning Concepts

Student Question:

HI Bruce-

Can you help clarify for me seemingly contradictory information in the two sentences below regarding “disinheriting children”?

The first sentence seems to imply that the surviving spouse could disinherit children. However, the second sentence states that QTIPs are often used to “prevent a surviving spouse from disinheriting children.”

#1: “In some circumstances, such testamentary power might provide assurance that the surviving spouse would not be neglected by adult children due to their fear of being disinherited if they did so.”

#2: “QTIP trusts are often incorporated to prevent a surviving spouse from disinheriting children. It assures that, while the assets will be there for the surviving spouse during his/her lifetime should they be needed, at their death the assets remaining in trust will pass to the decedent’s children.”

Thanks for your help.

Kevin

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Instructor Response:

Hi Kevin,

The testator/decedent spouse has the discretion but not the obligation to give the surviving spouse a limited power of appointment (LPOA). The LPOA approach is seen frequently when the spouses did not divorce and the children are their biological or adopted children.

A testator/decedent spouse with the goal of protecting the QTIP remainder for his or her children at the death of the surviving spouse would NOT give the surviving spouse an LPOA. This approach might be chosen in a second marriage in which there are children from the previous marriage.

Bruce