Question

A QTIP trust does which of the following?

a. Allows the testator to direct the ultimate distribution of trust assets.
b. Allows the surviving spouse to defer the receipt of income from the trust in order to manage their income tax exposure.
c. Allows the spouse an unlimited right of withdrawal.
d. Allows the spouse an inter vivos right to appoint $100,000 per year.

Answer 1

A QTIP trust allows the testator to direct the ultimate distribution of trust assets, allows the surviving spouse to defer income, and grants the spouse an unlimited right of withdrawal.

Step-by-step explanation:

A QTIP trust does which of the following?

A QTIP trust does the following:

1. Allows the testator to direct the ultimate distribution of trust assets. A QTIP trust allows the person who creates the trust (the testator) to specify how the assets in the trust will be distributed after their death.
2. Allows the surviving spouse to defer the receipt of income from the trust in order to manage their income tax exposure. The surviving spouse has the option to delay receiving income from the trust to minimize their tax liability.
3. Allows the spouse an unlimited right of withdrawal. The spouse has the right to withdraw funds from the QTIP trust as needed.