Blended families are increasingly more common and, depending on when the second marriage takes place, they can add several layers of complexity to your estate planning journey.
To accommodate the unique needs associated with asset protection and distribution after your passing or the death of a current spouse, estate planning professionals created a specialty trust – referred to as a QTIP trust.
If you plan to remarry, we recommend scheduling a consultation with an experienced, local estate planning attorney to discuss how the marriage will impact your estate, allowing you to make informed decisions about your next steps.
QTIP Trusts Defined: Who Are They For and What Do They Do?
QTIP trust is short for a qualified terminable interest property trust. They are created to go into effect if you die before your current spouse.
A qualified terminable interest property trust protects designated assets as long as your current spouse is alive. Still, it ensures you have complete control over the distribution of those assets after they pass away.
However, it’s essential to note that a QTIP trust is a distinct type of trust and is considered irrevocable, meaning it is exceedingly difficult and nearly impossible to alter or amend it once established. That’s why we cannot overemphasize the importance of consulting with a highly qualified attorney before adding a QTIP trust to your estate planning toolkit.
Is this powerful estate planning tool right for you?
While there are exceptions, QTIP trusts are most often used for those with larger estates that exceed California’s federal estate exemption amount (currently $13.99 million in 2025), but there are exceptions.
These estates can benefit clients who use the trust to:
- Avoid probate (without solid, legal estate plans in place, California intestate succession laws can blow your plans and intentions right out of the water).
- Reap substantial tax savings.
- Control the amount of money allocated to their spouse (via an income).
- Have control over who the heirs and beneficiaries are after your spouse dies.
- Safeguard assets for their heirs.
- Control how the remaining assets are distributed.
We recommend being transparent about the QTIP trust’s parameters with other immediate heirs and beneficiaries so they have an idea of what will happen after you die. While the news may not always land well (depending on the situation), it gives you time to work through it.
Reviewing and discussing relevant estate planning points with your children can also alleviate future issues between your spouse and other heirs because it’s all been established beforehand. Your estate planning attorney is always happy to help facilitate or mediate these conversations.
Benefits of a Qualified Terminable Interest Property Trust
There are several ways a QTIP trust works in the interest of your surviving spouse as well as other heirs and beneficiaries.
Providing income and security for your spouse
One of the most desirable benefits of these trusts is that they ensure your spouse is taken care of for the rest of their life (or as per the terms of the trust) if you precede them in death. In addition to an annual income, we can craft additional protections, such as ensuring they can remain in your primary home and retain ownership of additional vacation properties or assets, providing additional financial support for future medical expenses or long-term care, and so on.
Tax benefits for the estate
Many remarried couples find a QTIP trust to be one of the best solutions for reducing tax obligations. Once you’ve moved assets into the trust, they are protected by the unlimited marital deduction. So, when the first spouse dies, the second is relieved of potentially significant taxes owed. These are temporarily suspended until the second spouse’s death.
To protect children from other marriages
Most of the clients who choose to use QTIP trusts have blended families. This can mean wanting your assets, heirlooms, collectibles to be passed on to biological, step-, or former foster children – as well as anyone else you specify.
Some of these things can be distributed immediately upon your death using more standard versions of a will and trust. If, however, those assets contribute to your surviving spouse’s income or you want them to enjoy them for the duration of their life, you can ensure assets, properties, heirlooms, etc., are distributed according to your preferences after your spouse dies.
As an asset protection strategy (particularly from creditors)
One of the most common uses of an irrevocable trust is to protect certain assets from creditors. The QTIP trust format is no different; you can use it to incorporate stocks, bonds, retirement plans, properties, and other assets, all of which are safeguarded from being diminished by creditors.
These are some of the benefits that attract clients to QTIP trusts as a sound step in estate planning and future asset management. However, there are always inherent risks or potential downfalls to any long-term (and irrevocable) estate planning strategy.
Serious Considerations (& Potential Cons) For QTIP Trusts
Your estate planning lawyer can help you run through the pros and cons to determine whether it’s a smart strategy for your estate goals. Here are some of the serious considerations and potential cons associated with implementing a QTIP trust.
Lack of long-term flexibility
Becuase of the trust’s irrevocable nature, its inflexibility can pose problems down the road. This is especially true if you establish a trust 10 or 20 years before its implementation, by which time unforeseeable life events (other deaths, divorces, marriages, etc.) may have drastically altered what your beneficiary preferences would have looked like in real time.
Associated legal, financial, and other administrative costs
These trusts are more complex than a typical living will, so they incur higher costs to establish. Most of the time, it involves fees from both your legal team and a financial planning advisor, as well as tax accountants, among others. This type of trust continues to require successive administrative fees, including tax filing, throughout its lifetime, resulting in ongoing expenses.
The potential for conflict and strained relationships
Depending on your blended family dynamic, QTIP trust can be a source of conflict for heirs and beneficiaries, and this conflict may not rear its head until after you’re no longer there to serve as a buffer between angry children/heirs and your widow(er).
Loved ones may be opposed to anything from having “their inheritance” dependent on your spouse’s remaining life to the taxes that may eventually be imposed on them, and cannot be foreseen since tax laws are ever-changing.
Tseng Law Firm Walks Clients through the Ins & Outs of Complicated Estate Plans
When they’re the best fit, QTIP trusts do a wonderful job at protecting your assets and the ones you love long into the future.
Schedule an estate planning strategy consultation with Tseng Law Firm. We’ll walk you through the ins and outs of QTIP and other more complex estate plans that may be just right for your short- and long-term goals.