Marital and QTIP Trusts: What They Are and How They Protect Your Spouse

At The Law Offices of Lawrence H. Nemirow PC, I often meet clients who want to know how they can protect their spouse after death while still preserving assets for their children. This question comes up frequently in second marriages, blended families, or when there's a substantial estate. 

Marital trusts and Qualified Terminable Interest Property (QTIP) trusts are two estate planning tools that I use regularly to help clients reach these goals under California law. They serve different purposes but are both rooted in the need to create financial security for a surviving spouse while also respecting long-term family objectives.

Estate planning in California offers flexible options for individuals who want to provide for their spouses while managing taxes and controlling how their assets are distributed. Marital and QTIP trusts allow us to strike that balance. 

They give a surviving spouse access to income and, in some cases, principal, while preserving the underlying value for beneficiaries chosen by the person who passes away first. Understanding how these trusts work is important when crafting an estate plan that honors both emotional and financial priorities.

How a Marital Trust Functions Under California Law

A marital trust, sometimes referred to as an “A” trust in an A-B trust structure, is typically used between spouses to delay estate taxes until both partners have passed. 

This type of trust takes advantage of the unlimited marital deduction under federal tax law, which allows one spouse to transfer an unlimited amount of assets to the other spouse tax-free at death. In California, where community property rules apply, it’s especially important to understand how marital trusts interact with property characterization.

In a standard marital trust, the assets are held for the benefit of the surviving spouse, who receives income generated from the trust. Depending on the terms, the spouse may also receive principal distributions. 

Upon that spouse’s death, the trust usually specifies that the remaining assets pass to children or other beneficiaries. This gives clients peace of mind that their surviving spouse will be taken care of without giving them full control to redirect assets to someone else.

When I work with clients on estate planning involving marital trusts, we discuss control, access, and tax strategy. 

In California, where real estate values can push even modest estates into the taxable range, using a marital trust can delay taxation and allow for structured distribution. This keeps the estate organized and helps reduce the emotional strain that often comes with financial uncertainty after a spouse’s death.

What a QTIP Trust Offers That a Marital Trust May Not

A QTIP trust is a particular type of marital trust created to give even more control to the person creating the trust. The key difference lies in who gets to decide where the assets go after the surviving spouse passes. 

In a QTIP trust, the surviving spouse receives all income for life and may receive principal if the terms allow, but they cannot change the final beneficiaries. That decision is locked in by the person who established the trust. In this way, a QTIP trust preserves the wishes of the first spouse to die, even years later.

Under California law, QTIP trusts work well in situations where one spouse wants to protect their biological children from being disinherited by a surviving step-parent. This is especially common in blended families. 

The QTIP structure meets the legal requirements to qualify for the marital deduction, so no estate tax is due at the first death, but it also prevents the surviving spouse from diverting the remaining trust assets to a new spouse or others.

From an estate planning perspective, a QTIP trust gives structure where uncertainty might otherwise grow. I’ve seen clients breathe easier knowing they can take care of a surviving spouse without compromising the inheritance they want to leave behind. The QTIP trust acts as a bridge, connecting immediate support with long-term goals.

Key Tax Implications of Marital and QTIP Trusts

Both marital and QTIP trusts are tools that help postpone federal estate taxes until the death of the second spouse. This is made possible by the unlimited marital deduction. 

While California currently does not have a state-level estate tax, federal estate taxes still apply for larger estates. As an estate planning attorney, I use these trusts to delay the tax trigger and often pair them with credit shelter trusts or other strategies to reduce total exposure.

With a marital trust, the surviving spouse often has more flexibility in spending or distributing the assets, which may increase the size of their taxable estate later on. 

With a QTIP trust, the assets are essentially frozen from an estate planning standpoint—the spouse has income rights but not control over distribution. This can help reduce disputes later among children, especially in families where tension might arise.

I remind my clients that with both types of trusts, the Internal Revenue Code requires certain formalities for them to qualify for the marital deduction. The QTIP trust, in particular, requires that an election be made on the estate tax return. 

Missing that deadline can affect tax treatment significantly, so careful planning and follow-through are essential. In my practice, I work closely with accountants and trustees to make sure nothing is overlooked during administration.

Using These Trusts in Second Marriages and Blended Families

In my experience, marital and QTIP trusts are especially valuable in second marriages. Often, spouses want to care for one another but also want to leave assets to their own children. 

Without a trust structure, leaving everything outright to a new spouse may result in those assets never reaching the intended children. With a QTIP trust, for example, a husband can provide for his second wife during her lifetime and still preserve the principal for his children from a prior marriage.

California’s community property rules add another layer to this. Property acquired during marriage is generally considered community property, but separate property remains individually owned. When drafting these trusts, I work with clients to clearly identify and allocate assets, especially real estate, so there’s no confusion about ownership later.

These trusts also reduce the potential for litigation. I've seen situations where a surviving spouse and stepchildren clash over assets. By using a QTIP trust, we establish a binding framework that honors the intentions of the deceased spouse while still supporting the surviving one. 

It keeps decisions out of court and places them into a clearly written plan, which is a core goal of thoughtful estate planning.

Trust Administration and Spousal Rights in California

Once a marital or QTIP trust is established and funded, administration becomes the next step. Trustees must follow California’s probate code and trust law in managing these trusts. That includes:

• Providing accountings

• Making distributions according to the trust’s terms

• Managing investments prudently

I advise clients not just in creating trusts, but also in administering them properly after one spouse dies.

Spousal rights also need to be taken into account. In California, a surviving spouse may have claims under community property laws even if a trust says otherwise. That’s why clear drafting and proper funding of the trust are critical.

When we create these trusts, we look at every title, beneficiary designation, and deed to be sure it matches the estate plan. It’s not just about setting up a trust; it’s about building a plan that holds up when it’s needed most.

In administering a QTIP trust, for example, the trustee must distribute all income to the surviving spouse and may make principal distributions only as allowed by the trust. The surviving spouse cannot redirect assets, and the trustee must remain loyal to the deceased spouse’s instructions. 

This balance of duties is central to why so many clients choose QTIPs for peace of mind.

Why Marital and QTIP Trusts Remain Estate Planning Staples

At The Law Offices of Lawrence H. Nemirow PC, my focus is always on building estate planning strategies that reflect real-life needs. I’m proud to serve Los Alamitos, California, and throughout Los Angeles County, Orange County, Huntington Beach, Newport Beach, Cerritos, Santa Ana, Anaheim, and Long Beach. Call today.