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Flexible Trusts: Protect Your Business and Help Your Spouse
When a business interest constitutes a substantial portion of an estate and the surviving spouse has little knowledge of or interest in the business, special problems can arise. Leaving your entire estate outright to your spouse in your will may provide for his or her needs, but it raises questions about preservation of the business for the benefit of your children. One solution is a qualified terminable interest property (QTIP) trust.
Gift Spotlight: JoAnn owns a successful business in which her daughter Meredith is an active participant. She wants Meredith to have the business someday but is concerned that her husband, Steve, will need the income from the business after her death.
In her will, JoAnn directs that the business interest be held in a QTIP trust with all income payable annually to Steve for the rest of his life. At Steve’s death the business will pass outright to Meredith. The benefits include:
- The business will continue to be managed properly during Steve’s lifetime, and he will receive the income.
- The entire value of the business will qualify for the marital deduction in JoAnn’s estate.
- The value of the business will be includible in Steve’s estate at his later death, when it passes to Meredith.
Get our complimentary guide for more ways to use a QTIP trust, including a gift to Stephens College that your spouse can use as needed before it comes to us. |
