A QTIP trust is one way married couples may provide for a surviving spouse while the first spouse decides who receives the remainder. This guide explains the basics, how it may relate to the Massachusetts estate tax and an A/B trust, and where your attorney and CPA fit in.
Estate Structure Guide · Updated October 2026
A QTIP (qualified terminable interest property) trust is a trust that may provide a surviving spouse with all income for life while the first spouse's named beneficiaries receive what remains afterward. If the requirements are met and the executor makes the election, the trust may qualify for the marital deduction. Your attorney drafts it.
Key takeaways
The name describes the property rather than a single kind of document. “Terminable interest” refers to the fact that the surviving spouse's interest ends, typically at that spouse's death. “Qualified” refers to meeting the federal rules that allow the marital deduction despite that ending. In estate planning, the trust is commonly created within a revocable living trust or a will and generally takes effect after the first spouse dies. A QTIP trust can also be created by lifetime gift, which this guide does not cover.
Federal law sets the conditions. In general terms, the property must pass from the first spouse to the surviving spouse, the surviving spouse must have a qualifying income interest for life, and the executor must make the QTIP election. Each point below is general information, and your attorney applies it to the actual document.
Sources: 26 U.S.C. §2056(b)(7), Treas. Reg. §20.2056(b)-7 and the IRS Instructions for Form 706. Reviewed October 8, 2026. Rules and forms may change, and whether a particular trust qualifies is a question for your attorney.
The sequence below is a simplified illustration, not a description of any family's plan. Terms, elections and timing vary with the documents and the law in effect.
The couple works with an estate planning attorney so the documents state who receives the income, who serves as trustee, and who receives the remainder.
At the first death, assets pass into the trust as the documents direct. Titling and beneficiary designations need to match the plan for that to happen.
The executor, guided by the attorney and CPA, decides whether and how much of the trust to elect as QTIP on the estate tax return.
The surviving spouse receives the trust income. At that spouse's death, the remainder passes to the beneficiaries the first spouse named, and the property is generally included in the survivor's estate.
Because the surviving spouse generally cannot change who receives the remainder, a QTIP trust is sometimes discussed by couples in blended families or by couples who want a more defined path for the remainder. That control is also a limitation: the surviving spouse may have less flexibility than if everything passed outright.
Two Massachusetts features frame the discussion. First, according to the Massachusetts Department of Revenue, a Massachusetts estate tax return is generally required for a resident decedent dying on or after January 1, 2023 when the gross estate plus adjusted taxable gifts exceeds $2,000,000, and a credit of up to $99,600 may reduce the tax. Second, Massachusetts has no portability election for its estate tax. The Department's guidance provides the $2,000,000 threshold and the credit, but no way to carry a deceased spouse's unused amount to the survivor.
That is why the interaction matters. If a couple's combined estate is near or above $2 million, assets passing to a surviving spouse may qualify for a marital deduction at the first death, but they may then be counted in the survivor's estate. Massachusetts also lets the executor make a QTIP election for Massachusetts purposes without making the same election federally. The Department's Form M-706 instructions state that this Massachusetts election is irrevocable, and that different federal and Massachusetts elections may lead to a different value of QTIP property in the survivor's estate for federal and Massachusetts purposes.
For decedents dying on or after August 1, 2025, the Department's instructions also require “Massachusetts QTIP” to be added to the decedent's federal gross estate when computing the Massachusetts tax. The Department defines it as QTIP that is not included in the decedent's federal gross estate and for which a Massachusetts estate tax deduction was allowed when it was transferred to the decedent. Your attorney and CPA can explain whether a federal election, a Massachusetts election, or both are relevant to your trust.
Federal law is a separate calculation. The IRS states that the federal basic exclusion amount is $15,000,000 for calendar year 2026. Massachusetts, however, computes its estate tax by reference to the Internal Revenue Code as of December 31, 2000, and the Department of Revenue states that later federal changes have no impact on the Massachusetts estate tax.
Sources: Massachusetts Department of Revenue, Estate Tax Guide (page updated April 23, 2026), Instructions for Form M-706 (dates of death on or after August 1, 2025) and Estate Tax Forms and Instructions; IRS, What's new: Estate and gift tax. Verified against mass.gov and irs.gov as of October 8, 2026. Thresholds, credits and calculation steps may change, and the amount of tax for any estate is a question for your attorney and CPA.
To organize a general estimate before you speak with your professionals, use the Massachusetts estate tax calculator. It is an educational tool and not legal or tax advice. For the wider picture, see the Massachusetts estate planning guide.
An A/B trust usually splits the estate at the first death into two trusts. Trust B, the credit shelter trust, may hold assets up to the first spouse's available exemption. Trust A, the marital trust, may hold the rest, and it is often designed as a QTIP trust. In that design, the QTIP trust helps defer tax on the portion above the exemption, while the credit shelter trust may use the first spouse's Massachusetts exemption that would otherwise go unused.
| Feature | QTIP (marital) trust | Credit shelter (bypass) trust |
|---|---|---|
| Typical purpose | May qualify for the marital deduction, which may defer tax at the first death | May use the first spouse's available exemption |
| Surviving spouse's access | All income at least annually; principal access depends on the terms | As the terms specify, often for health, education, maintenance and support |
| At the survivor's death | Generally included in the survivor's estate | Generally not included, if properly structured |
| Who sets the final beneficiaries | The first spouse, through the trust terms | The first spouse, through the trust terms |
A QTIP trust may also be used without a credit shelter trust, and an A/B plan may be built in other ways. For the full structure, a worked example and the funding issues, read how an A/B trust may use both Massachusetts exemptions through credit shelter and QTIP trusts. For the follow-through that makes either trust operate as drafted, see how a Massachusetts trust may be funded and who coordinates each step.
The surviving spouse generally receives income, and access to principal depends on the trust terms. That may be a poor fit if the survivor is likely to need broader access.
QTIP property is generally included in the survivor's estate, so a larger estate at the second death may still be exposed to Massachusetts tax, depending on the law and values at that time.
The QTIP election is generally irrevocable, so the executor, attorney and CPA typically review it carefully before it is made.
A trust may need its own accounting and tax filings, which may add cost and work. Retirement accounts payable to a trust raise separate questions, discussed in how retirement income planning may coordinate with IRA and plan beneficiary decisions.
These questions are educational starting points. Your professionals can answer them for your situation.
Michael Cammarata, CFP®, is not an attorney or CPA and does not draft trusts, give legal or tax advice, or prepare tax returns. His role is to coordinate the financial side of the plan with the professionals you choose. If you need an introduction, he can offer one from a network of independent Massachusetts professionals, and you decide whom to engage. Read more about how a financial advisor coordinates estate planning with your attorney and CPA.
Gather accounts, titling, beneficiary designations and existing documents for the attorney and CPA to review.
Provide asset values and illustrations so the attorney can evaluate whether a QTIP or A/B structure may fit.
Follow the retitling and beneficiary changes the attorney specifies and note open items for the CPA.
Asset values, tax rules and family circumstances change, which may call for another look with your professionals.
QTIP stands for qualified terminable interest property. It describes property in which a surviving spouse has a qualifying income interest for life, and for which the executor of the first spouse's estate makes an election so the property may qualify for the marital deduction. Your estate planning attorney determines whether a trust can meet the requirements.
Not exactly. An A/B trust is a two-trust arrangement in which one trust, often called the credit shelter or bypass trust, uses the first spouse's available exemption, and the other, often called the marital trust, may be a QTIP trust. A QTIP trust is one possible component of an A/B plan, and it may also be used on its own. Your attorney can explain which design fits your documents.
A QTIP trust generally defers estate tax rather than avoiding it. If the election is made, the trust assets may qualify for the marital deduction at the first death, but QTIP property is generally included in the surviving spouse's estate at the second death. Whether any Massachusetts estate tax is due depends on the size of the estate, the trust terms, the elections made, and the law at that time.
The first spouse generally decides, through the trust document, because the surviving spouse receives the income rather than the right to redirect the principal. That feature is why some families, including blended families, consider this structure. It may also limit the surviving spouse's flexibility, so it is worth discussing with your attorney.
According to the Massachusetts Department of Revenue's Form M-706 instructions, the executor or other fiduciary is not required to make the same QTIP election for federal purposes in order to make the election for Massachusetts purposes, and the Massachusetts election is irrevocable. Because the two elections can differ, the value of QTIP property in the survivor's estate may differ for federal and Massachusetts purposes. Your attorney and CPA can explain how this applies to your trust.
No. Your estate planning attorney drafts the trust, the executor makes any election on the estate tax return, and your CPA advises on tax filings and consequences. A financial advisor, such as Michael Cammarata, CFP®, may coordinate the financial information, account titling, and follow-up among those professionals. He is not an attorney or CPA.
This guide is for educational purposes only and does not constitute individualized legal, tax, or investment advice. Investment advisory services are offered through MSA Financial, LLC, a Registered Investment Adviser (CRD #107768). MSA Financial is an SEC-registered investment adviser. Registration with the SEC does not imply a certain level of skill or training. Investing involves risk, including the potential loss of principal. Michael Cammarata is not an attorney or CPA and does not provide legal or tax advice. He does not draft legal documents or prepare tax returns. He coordinates with clients' existing estate attorneys and CPAs. Tax treatment depends on individual circumstances, and legal and tax advice should be obtained from your own attorney and CPA. Massachusetts and federal estate tax figures were verified against mass.gov and irs.gov as of October 8, 2026 and may change.