Question

Hilda and Horace, a married couple, were both previously married to others. Horace has an estate of $2 million from which he would like to provide income for Hilda following his death, but at her death, he would like the $2 million to be distributed to his children from his first marriage. Hilda has a fairly large estate and very little use for Horace's children. Horace wants Hilda to have the income and use of the trust assets, if needed, during her lifetime, but he does not want her to be able to change the beneficiary of the trust. Horace wants to delay any estate tax until Hilda's death. The best trust for Horace would be a

Group of answer choices

Qualified Domestic Trust

Grantor Retained Interest Trust.

QTIP Trust

Irrevocable Life Insurance Trust.

Answer 1

Answer:-

The best trust for Horace is qualified terminable interest property (QTIP) trust as it is a marital trust that provides Hilda after his death while retaining the controls on assets for his children from first marriage ( Future generations)

Therefore QTIP Trust is the correct Option.

The other options are incorrect.

The irrevocable life insurance trust is permanent life insurance policy when the insured is alive and distribute the assets on the death of insured.This is incorrect choice.

Grantor-retained interest trust is  irrevocable and allow the grantor to save on gift and estate taxes and getting trust income during the term which is not the case here. This is incorrect choice.

Qualified domestic trust provides deduction for assets transferred from the decedent's estate to a surviving spouse who is not owning a citizenship of the United States. This is incorrect choice.