terminable interest


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Words related to terminable interest

an interest in property that terminates under specific conditions

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The decedent would not get a marital deduction for the amount placed in the family trust since the transfer to the family trust would have been a terminable interest. Upon the surviving spouse's death, the amount in the family trust would not be included in the survivor's gross estate, thereby bypassing the estate.
A "terminable interest" in property is an interest which will terminate or fail on the lapse of time or on the occurrence or the failure to occur of some contingency.
(3) (For estate tax value of survivor's annuity, see Q 603.)Where a joint and survivor annuity between spouses is treated as qualifying terminable interest property for gift tax purposes (see Q 732) and the donee spouse dies before the donor spouse, nothing is included in the donee spouse's estate by reason of the qualifying interest.
(7) Refer to page 41 for a chart illustrating the use of a qualified terminable interest property trust.
The person required to file the Illinois return may elect on a timely filed Illinois return a marital deduction for qualified terminable interest property under Section 2056(b)(7) of the Internal revenue Code for purposes of the Illinois estate tax that is separate and independent of any qualified terminable interest property election for federal estate tax purposes.
An ILIT, he adds, might also be deemed prudent as a substitute for a qualified terminable interest property (QTIP) trust that provides an income stream for a surviving spouse; and, upon the spouse's death, a distribution of remaining assets to surviving children.
If you're concerned about estate taxes, it may be worthwhile to investigate sophisticated techniques designed to lessen their blow, such as the qualified terminable interest property (QTIP) trust.
spouse through use of a Qualified Terminable Interest in Property (QTIP)
Since the spouse will receive the entire interest in the proceeds rather than a nondeductible terminable interest, the marital deduction will be allowed even if the insured names secondary or other contingent beneficiaries in the event the noninsured spouse does not survive the insured.
Elect (or do not elect) to qualify certain terminable interest property for marital deduction [Chapter 24].
The deduction is available for gifts to trust only under limited circumstances in which (1) the spouse maintains some control of the gifted assets, such as a general power of appointment or (2) the gifted property is treated as "qualified terminable interest property," or (3) the spouse, other than the donor, is the only noncharitable beneficiary of a qualified charitable remainder trust.
Its four main chapters cover: tax-related drafting, including terminable interest, survivorship conditions, and a variety of trusts; drafting depositive provisions, including wills and trusts; creating revocable trusts; and, drafting fiduciary provisions, including information on providing additional powers to the trustee.
For those clients who, however, insist on deferring the estate taxes and giving the second spouse all the income on the decedent's assets, the qualified terminable interest property (QTIP) trust is the only viable option.
2056(a) of the Internal Revenue Code allows a "marital deduction" from the taxable estate for property that passes from the decedent to the surviving spouse, thereby removing such property from taxation in the estate.(19) Qualified terminable interest property (QTIP) by definition qualifies for the marital deduction under this section.(20) QTIP is defined as property that passes from the decedent to the surviving spouse, who will have qualifying interest income for life but not actual title to the property.(21)
A qualified terminable interest property trust, or QTIP, may also be an attractive estate-planning choice for the business owner.