Revocable Trust for Married Individual: Credit Shelter and QTIP Trusts with GST Tax Planning (Massachusetts)

This legal template refers to a comprehensive revocable trust designed specifically for married individuals residing in the state of Massachusetts. The trust includes two components: a credit shelter trust and a qualified terminable interest property (QTIP) trust.

The credit shelter trust is intended to minimize or eliminate federal estate taxes upon the death of the grantor (the person creating the trust) by sheltering a portion of their assets from being subject to estate taxation. This trust ensures that the assets allocated to it will be protected and transferred to the trust beneficiaries while taking full advantage of the available estate tax exemptions.

On the other hand, the QTIP trust allows the grantor to provide for their surviving spouse while maintaining control over the ultimate disposition of the assets. This trust structure ensures that the assets allocated to the QTIP trust qualify for the marital deduction, which allows the grantor, upon their death, to transfer assets to their surviving spouse without incurring estate taxes. Additionally, the grantor can designate the ultimate beneficiaries who will inherit the assets remaining in the QTIP trust after the surviving spouse's death.

Moreover, the trust is structured to incorporate generation-skipping transfer (GST) tax planning. GST tax planning aims to minimize the potential tax burden imposed on assets transferred to skip persons, such as grandchildren or future generations. By including GST tax planning provisions, this trust helps to preserve a greater portion of the grantor's wealth for future generations.

Overall, this legal template offers a comprehensive solution for married individuals in Massachusetts who seek to minimize estate taxes, provide for their surviving spouse, and efficiently transfer wealth to future generations while preserving the benefits of revocability and flexibility for the grantor during their lifetime.