The Family Estate & Legacy Solution Center

Estate Planning Definitions & Glossary

Below is a helpful list of terms and words found on this site or related to estate and trust planning.

Qualified Domestic Trust (QDOT)

A trust created upon the death of an individual that qualifies for the federal estate tax marital deduction where the decedent's surviving spouse is not a United States citizen. A QDOT is the only form of deduction for a decedent who leaves an alien spouse. In addition to satisfying the normal marital deduction rules, the trust instrument must require that at least one trustee be an individual who is a United States citizen or domestic corporation with trust powers, and that no distributions can be made without the consent of that trustee. An appropriate election on the federal estate tax return is also required.

Qualified Personal Residence Trust (QPRT)

An irrevocable trust designed to minimize transfer (estate and gift) taxes associated with a personal residence. The grantor transfers a personal residence to the trust for a stated term of years. Upon the expiration of the term, the trust beneficiaries (typically grantor's children) own the home. So long as the grantor survives the trust term, the residence is excluded from his estate for federal estate tax purposes.

Qualified Subchapter S Trust (QSST)

Trusts that may be shareholders of Subchapter S Corporations that are designed to comply with the Subchapter S shareholder requirements. If a trust holds Subchapter S corporate stock and does not qualify as a QSST, then the Subchapter S election may be destroyed, resulting in tax on the corporate earnings.

Qualified Terminal Interest Property Trust (QTIP)

A trust that is held exclusively for the surviving spouse during the surviving spouse's lifetime. Can be established either during the life of the grantor (an inter vivos QTIP Trust) or at the grantor's death through his or her will or revocable trust (a testamentary QTIP Trust). In order to qualify under the marital deduction rules, the surviving spouse must exclusively have the right to all of the income earned during his or her life. This type of trust allows a grantor to qualify amounts for the marital deduction, yet ensuring that the remainder of the trust will eventually be distributed to the grantor's intended beneficiaries.

Disclaimer: The information contained on this site shall not be construed as legal advice, as the information is general in nature and is not specific to any individual client or jurisdiction. No attorney/client relationship shall be established in the use of this site.While every effort is made to keep the information up to date, there is no warranty, expressed or implied, that the information contained herein is current. One should always consult with his or her own qualified estate planning attorney before acting on any legal or tax matter.