What is the Marital Subtrust?

Marital Trust

a.   The marital trust is also sometimes called the:

(1)   “C trust”

(2)   “QTIP trust” or

(3)   “Marital deduction trust.”

b.   It is generally designed to qualify for the marital deduction and is usually the receptacle for the marital share.

c.   Depending on drafting, for purposes of making a “reverse QTIP election”:

(1)   The marital trust may include only a portion of the marital share, e.g., the difference (if any) between:

(a)   The deceased spouse’s remaining estate tax applicable exclusion amount after making lifetime taxable gifts; and

(b)   The deceased spouse’s unused GST exemption; and

(2)   The remaining amount of the marital share may be given directly to the survivor’s trust.

d.   Alternatively, the deceased spouse may have devised the entire marital share to the survivor’s trust, in which event there will be no marital trust.

e.   There are several forms of marital deduction trusts, the most common being a QTIP trust under IRC §2056(b)(7).

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