Married couples in Arkansas often want to accomplish two goals with their estate plan: provide for the surviving spouse and make sure the remaining assets ultimately pass to the people they choose. Those goals can become especially important for couples with significant assets, children from previous relationships, or concerns about what might happen if the surviving spouse remarries. One estate planning strategy that may help is a Qualified Terminable Interest Property Trust, commonly called a QTIP trust. In some situations, an Arkansas estate planning attorney may recommend creating a QTIP trust during the spouses’ lifetimes rather than waiting until the first spouse dies.
What Is a QTIP Trust?
A QTIP trust is designed to provide financial benefits to a surviving spouse while allowing the person creating the trust to control who ultimately receives the remaining trust property. Generally, the surviving spouse must be entitled to the trust’s income for life, and the trust must satisfy specific federal tax requirements to receive QTIP treatment. The basic idea is relatively simple: Take care of your spouse during his or her lifetime while preserving the remaining assets for the beneficiaries you select. This can make a QTIP trust particularly valuable when a married couple wants more certainty about what will happen to family wealth after one spouse dies.
What Is an Inter Vivos QTIP Trust?
“Inter vivos” simply means during life. An inter vivos QTIP trust is established while both spouses are living. This differs from a testamentary trust, which is typically established under a Last Will and Testament and becomes effective after death. With an inter vivos QTIP trust, one spouse may transfer assets into the trust for the benefit of the other spouse during life.
When properly structured and the appropriate federal tax elections and requirements are satisfied, transfers between spouses may qualify for the marital deduction rather than being treated as a currently taxable gift. Because the tax rules governing QTIP trusts are complex, these trusts should be carefully coordinated with the couple’s overall estate and tax planning.
Why Would an Arkansas Married Couple Use a QTIP Trust?
One of the biggest reasons is control. Suppose a husband and wife want to make sure the surviving spouse is financially secure. However, after the surviving spouse dies, they want the remaining property to pass to their children. Simply leaving everything outright to the surviving spouse doesn’t guarantee that result. After receiving the property, the surviving spouse could potentially change his or her estate plan, make substantial gifts, add other beneficiaries, or leave the assets to a future spouse. A properly drafted QTIP trust can provide for the surviving spouse without giving the surviving spouse unlimited control over where the remaining trust property ultimately goes.
QTIP Trusts and Blended Families in Arkansas
QTIP trusts can be particularly useful for blended families. Consider an Arkansas resident who has children from a prior marriage and later remarries. The person may want the new spouse to be financially secure but also want certain assets ultimately to pass to his or her children. Leaving everything outright to the new spouse creates a risk. Even if the spouses currently agree that the assets will eventually pass to the children, circumstances can change. The surviving spouse might remarry, change an estate plan, make gifts to other family members, or simply have different priorities years later.
A QTIP trust can help balance these competing concerns. The surviving spouse receives the benefits required under the trust, while the person establishing the trust can determine who receives the remaining property after the surviving spouse’s death.
Can a QTIP Trust Protect Against Remarriage?
A common concern in estate planning is what happens if the surviving spouse remarries. For example, a couple may have spent decades accumulating property together. Neither spouse necessarily wants those assets eventually passing to a future spouse—or to the future spouse’s children—rather than their own family. A QTIP trust can reduce this risk because the assets remain in trust rather than being transferred outright to the surviving spouse. The trust agreement determines what happens to the remaining property after the surviving spouse dies. This can provide considerably more certainty than relying on the surviving spouse to maintain the same estate plan for the rest of his or her life.
QTIP Trusts Can Also Help With Incapacity Planning
Estate planning isn’t only about death. A properly drafted trust can provide a structure for managing assets if a spouse later becomes incapacitated. Instead of relying solely on a power of attorney or requiring family members to determine how assets should be managed, the trustee can administer the trust property according to the instructions contained in the trust agreement. For Arkansas families concerned about aging, incapacity, or long-term management of substantial assets, this can be another reason to consider trust-based planning.
Are There Tax Benefits to a QTIP Trust?
There can be significant federal estate and income tax considerations. One important feature of QTIP planning is the potential availability of the federal marital deduction. When the statutory requirements are satisfied and the proper election is made, property transferred to a QTIP trust can qualify for the marital deduction even though the surviving spouse does not receive complete ownership of the assets.
Instead, estate taxation may generally be deferred until the surviving spouse’s death. Assets included in the surviving spouse’s taxable estate may also receive a new income-tax basis at death under applicable federal tax law. Depending on the assets and their appreciation, basis planning can have significant capital-gains-tax consequences for the ultimate beneficiaries.
However, tax treatment depends heavily on how the trust is structured, funded, and administered. A QTIP trust should not be created solely because someone has heard that it provides a “step-up in basis.” The entire estate and tax picture should be considered.
Does Arkansas Have an Estate Tax?
Arkansas currently does not impose a separate state estate or inheritance tax. However, Arkansas residents may still need to consider federal estate and gift tax laws, income taxes, capital gains, property ownership, creditor issues, and the Arkansas laws governing trusts and estates. For many Arkansas families, the primary reason for using a QTIP trust may not be avoiding estate tax at all. Instead, the primary benefit may be control over where the property ultimately goes.
Is a QTIP Trust Right for Every Married Couple?
No. Many Arkansas married couples can accomplish their goals with a well-designed revocable living trust, wills, beneficiary designations, powers of attorney, and other traditional estate planning documents.
A QTIP trust tends to become more attractive when there are additional concerns, such as:
- Children from a previous marriage;
- Significant or appreciating assets;
- A desire to provide for a spouse without giving the spouse complete control over the ultimate beneficiaries;
- Concerns about remarriage after the first spouse’s death;
- Different beneficiaries for each spouse;
- Federal estate or gift tax considerations;
- A desire to preserve assets for children or other family members; or
- Complex family or financial circumstances.
The right strategy depends on the couple’s assets, family structure, tax situation, and long-term goals.
Arkansas Estate Planning for Married Couples
A good estate plan should do more than determine who receives property when you die. It should consider what happens after the first spouse dies, if the surviving spouse becomes incapacitated, if the surviving spouse remarries, and ultimately when both spouses are gone.For some Arkansas married couples, particularly those with blended families or substantial assets, a QTIP trust can provide an effective way to care for a surviving spouse while protecting the family’s long-term estate plan.
Because QTIP trusts involve both Arkansas trust law and federal tax law, careful drafting and coordination are important. The Riddle Firm, PLLC helps Arkansas families create estate plans designed around their assets, families, and long-term goals. If you are considering a trust or want to know whether a QTIP trust makes sense for your family, an individualized estate planning review can help determine the appropriate strategy.
Reference: Kiplinger (Aug. 23, 2026) “Worried Your Estate Plan Will Unravel When One of You Passes Away? Why a QTIP Trust Can Give Married Couples Peace of Mind”
Frequently Asked Questions
A Qualified Terminable Interest Property (QTIP) trust is an estate planning tool that can provide income and financial support for a spouse while allowing the person creating the trust to determine who ultimately receives the remaining assets. It can be particularly useful for Arkansas couples with blended families or children from previous relationships.
Generally, a QTIP trust provides the beneficiary spouse with income from the trust for life. After that spouse dies, the remaining trust assets pass to beneficiaries selected by the spouse who created the trust, such as children or other family members.
It can be. A QTIP trust can provide for a surviving spouse while helping ensure that the remaining assets ultimately pass to the children or other beneficiaries chosen by the spouse who created the trust. This can be especially valuable when either spouse has children from a prior marriage.
A QTIP trust can help prevent trust assets from being redirected to a surviving spouse’s new spouse or other unintended beneficiaries. Because the assets remain in trust, the person creating the QTIP can determine who receives the remaining property after the beneficiary spouse dies.
A revocable living trust is commonly used to manage assets during life, plan for incapacity, and avoid probate for properly funded assets. A QTIP trust has a more specialized purpose: providing benefits to a spouse while controlling who ultimately inherits the remaining trust property.
Arkansas does not currently impose a separate state estate or inheritance tax. However, federal estate and gift tax rules may still apply, and income-tax and capital-gains considerations can be important when deciding how a trust should be structured.
Assets included in the surviving spouse’s gross estate may generally receive an adjusted income-tax basis at the surviving spouse’s death under federal tax law. Because basis and estate-tax rules can be complex, the potential tax consequences should be evaluated as part of the overall estate plan.