[WSBAPT] QTIP for "benefit of" spouse ?

[Cyrus Field]

Listmates-I am drafting an EP where a testamentary QTIP trust will likely be
funded with several million $$ so I want to make extra sure I get it right.


 

I noticed the proposed distribution language in the WA EP Deskbook for
Marital Trusts is that the trustee shall "pay to or for the benefit of my
spouse" all income at least annually. Typically with testamentary trusts I
also include language giving the PR/trustee discretion to make a
distribution not just to the beneficiary but also to their a custodian,
fiduciary, or person/entity furnishing health, education, support or
maintenance for the beneficiary. 

 

My question is whether giving the trustee such discretion for the manner in
making distributions is sufficient to meet the spouse's "right to income"
requirement? I see RCW 11.108.050 is a "marital deduction" savings statute
and says that to the extent necessary to save the deduction, assets can't be
distributed "to a person other than the transferor's spouse". Further, the
IRS regs seem to imply their isn't a problem if spouse would get
substantially all beneficial enjoyment of the trust  property (e.g. income,
which would be taxable to the spouse) but it certainly isn't clear.  

 

I can draft manner of making the distribution so that it is limited to the
extent it doesn't jeopardize the marital deduction but am wondering if that
is necessary. 

Thanks in advance for any thoughts/insight/guidance, Cy

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20150330/23d39d22/attachment.html>