Letter to Client: Drafts of Revocable Trusts with Credit Shelter and QTIP Trusts for Married Individual (New York)

This legal template likely refers to a letter that is being sent to a client, providing drafts of revocable trusts and explaining the inclusion of credit shelter and QTIP trusts. The intended recipient of this letter appears to be a married individual residing in the state of New York, with the legalities being governed by the laws of the United States.

The purpose of the letter is to present the client with initial drafts of their revocable trusts, which are legal arrangements allowing individuals to manage and distribute their assets during their lifetime and after their death. By including credit shelter trusts (CSTs) and Qualified Terminable Interest Property (QTIP) trusts, the attorney or legal professional is proposing specific provisions within the revocable trusts to address important matters related to tax planning and providing for the surviving spouse.

Credit shelter trusts, often referred to as bypass trusts, are commonly utilized in estate planning to help minimize estate taxes by taking full advantage of each spouse's applicable exclusion amount. Such trusts preserve the deceased spouse's estate tax exemption for the benefit of future generations, while still providing for the surviving spouse.

QTIP trusts, on the other hand, are designed to provide income for the surviving spouse while ensuring that the remaining assets ultimately pass to beneficiaries chosen by the deceased spouse. This type of trust grants the surviving spouse a life interest in the trust assets, but ultimately allows control over the distribution of the trust principal to the intended beneficiaries. This can be particularly useful when there are children from a previous marriage or specific individuals that the client wishes to benefit from their estate.

Overall, this legal template will likely provide the client with a comprehensive overview of the proposed arrangements as well as the specific provisions within their revocable trusts, emphasizing how the inclusion of credit shelter and QTIP trusts can help maximize tax advantages and achieve the client's desired distribution of assets upon their death.