What are the QTIP Qualifications Under I.R.C. Section 2056(b)(7):
One: The property must pass to the QTIP through the estate plan and NOT placed into the trust by the surviving spouse of the executor.
Two: The spouse may be entitled to a “qualified income interest” for life. The principal can never be paid o anyone other than the spouse. Upon the spouse death, the principal goes to named beneficiaries.
Three: No person has the power during the surviving spouse lifetime to appoint any part of the property to anyone other than the surviving spouse.
Four: The decedant’s executor must make a QTIP election on form 706 (which may be done by listing trust property on Schedule M of the form).
