Final answer:
A QTIP trust is designed to provide income to A)a surviving spouse and maintain control over the trust's assets after their death. The correct answer is that it must allow only income-producing assets for the spouse's benefit. It is a type of testamentary trust and allows usage of the principal for the spouse under set guidelines.
Step-by-step explanation:
The subject of this question pertains to a special type of trust known as a QTIP trust, which stands for Qualified Terminable Interest Property. This trust is an estate planning tool specifically designed to provide for a surviving spouse while maintaining control over the trust's assets after the spouse's death. Among the options provided, the correct answer is:
A. Give the surviving spouse the right to require only income-producing assets be in the trust.
The primary purpose of a QTIP trust is to ensure that the surviving spouse receives income from the trust for the duration of their life. Upon the surviving spouse's death, the assets then pass to other beneficiaries as specified by the grantor.
The QTIP trust does not provide the surviving spouse with a general power of appointment (option B), it specifically dictates that assets are provided for the spouse's benefit. It must be established as part of a will or testament (option C), making it a testamentary trust, and it allows the trustee to use the trust principal for the spouse's benefit (option D), but typically under certain guidelines established in the trust.