Navigating State-Only QTIP Trusts in Decoupled States

All estate-planning attorneys and wealth advisors with clients who live in a state with a state estate tax should be aware of the state-only qualified terminable interest property (QTIP) election. When reviewing existing estate plans or helping clients in these states implement a new one, practitioners should understand whether and to what extent language permitting this election is included to manage or prevent state estate tax from being due at the first spouse’s death. The decoupling of state estate taxes from the federal estate tax regime has introduced a host of planning challenges and opportunities for married couples. The state-only QTIP election is one of the most important and nuanced tools to address the challenge. I’ll examine…