A qualified domestic trust (QDOT) is a marital trust utilized for the benefit of a spouse that is not a U.S. citizen. This type of trust allows a non-U.S. citizen who is married to a U.S. citizen to qualify for the unlimited marital deduction, which keeps the estate from being subject to federal income taxes upon the death of the first spouse. Without a QDOT, these estate taxes would have to be paid at the first death. With a QDOT, however, the taxes are delayed until the surviving spouse passes. This is an estate planning tool implemented to allow the assets within the trust to provide for the non-citizen spouse after the citizen-spouse has passed away, without being heavily taxed first. If you are married to a non-U.S. citizen, Bach & Jacobs, P.A. attorneys can discuss a QDOT with you as part of your estate planning.
An incentive trust is a trust designed to encourage or discourage the occurrence of certain behaviors in the trust’s beneficiaries by using the distributions of the trust as an incentive. An incentive trusts holds and manages assets for the benefit of the beneficiaries of the trust, but it is different than any other type of trust in that it uses the trust’s assets to award beneficiaries for achieving desired goals. This type of trust is often used by parents or grandparents to pass on wealth to their children or grandchildren while dually encouraging them to be personally responsible and reach important milestones in their lives. This type of trust can also lay-out specific instructions regarding how the money within the trust can be distributed and can employ certain techniques that help ensure the beneficiaries of the trust will have financial independence beyond what the trust has given them. Advantages of incentive trusts include implementing age restrictions regarding when the beneficiaries can receive the assets within the trust, encouraging educational achievement, discouraging illegal or destructive behaviors and motivating positive behaviors.
If you have any further inquiries regarding this matter, please contact our office at: 941-906-1231 to schedule an appointment with one of our attorneys.
A trust is an entity created by an individual (the settlor) to hold assets for the benefit of the trust’s beneficiaries, while a trustee is appointed to manage the trust. Decanting a trust is the act of distributing assets from an old trust to a new trust that has more amicable terms. It gets its name from the process of decanting wine from its original bottle to a new one in order to eliminate any sediment residue; decanting a trust allows you to pour the assets from one trust into another while getting rid of any terms that aren’t amenable. Decanting is a powerful tool, as it allows the trustee of an irrevocable trust (one that cannot be modified or terminated after it has been signed) to essentially re-write an irrevocable trust without having to go to court, so long as the trustee complies with the motive and consent requirements of the Florida Trust Code.
