Which trust provides a life income to the surviving spouse but restricts the spouse's ability to redirect assets after death, commonly used in second marriages?

• A. QTIP trust
• B. Bypass trust
• C. A/B will
• D. Special needs trust (SNT)

Answer: (A)

In second-marriage planning, a Qualified Terminable Interest Property (QTIP) trust provides the surviving spouse with lifetime income while keeping the ultimate disposition of the trust assets in the hands of the first spouse’s chosen beneficiaries. The trust is drafted so the surviving spouse receives all (or nearly all) of the income for life, but cannot redirect or access the principal in a way that would change who receives the assets after the spouse dies. This arrangement lets the first spouse secure a marital deduction for estate tax purposes and ensure that, upon the surviving spouse’s death, remaining assets go to the intended heirs (often the children from the first marriage). Other options serve different purposes: a bypass trust is mainly about estate tax planning and preserving exemptions, an A/B arrangement uses wills to fund trusts after death, and a special needs trust is for enabling a disabled beneficiary to receive assets without losing eligibility for benefits.