A Trustee's Responsibilities for a QTIP Trust

• Management of a QTIP trust requires a high level of expertise.contract image by Valentin Mosichev from Fotolia.com
  
  A "Qualified Terminable Interest Property" trust, or QTIP trust, is designed to leave the surviving spouse with income for life, while the actual assets go to another person, generally children. This is a complicated trust and requires a great deal of management. The surviving spouse is entitled to income from the assets until she passes away, however, it is the trust manager, known as an executor, who is responsible for managing the assets with an eye towards the future and the trust creator's wishes.
  
  

Accounting

• Tax benefits are a primary reason for establishing a QTIP trust.tax forms image by Chad McDermott from Fotolia.com
  
  A QTIP trust requires constant accounting. Anything done with the trust must be documented, recorded and reported. Income paid to the surviving spouse, money withdrawn to maintain trust assets and any other expenditure coming from the trust funds must be reported at frequent and regular intervals. The frequency, duration and method of documenting depends on the specific state in which the QTIP trust exists, and any additional federal requirements, such as standard filings with the IRS.
  
  

Fiduciary Obligations

• A trustee is expected to have a high degree of expertise in the management of a trust that is above a common or general understanding. In addition to knowledge the trustee is expected to act with total trust, good faith and honesty towards the beneficiary. A fiduciary is bound to the trust and managing it's affairs to the best of his ability and is expected to be successful in the management and maintenance of the trust.
  
  

Repercussions

• A trustee should be absolutely sure of her ability before accepting the responsibility of overseeing a trust. In a QTIP trust the surviving spouse has a right to request an accounting from the courts if he feels that there is any wrong doing by the trustee. In addition a court could always decide that a trustee has engaged in "self-dealing," or a "conflict of interest." The exact rules that govern the trust vary state to state, but a trustee should be well versed in all local laws and regulations before deciding to oversee a trust.