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     C) Qualified Plan QTIP Formula


 

The Qualified Plan QTIP Formula Trust is a recommended partitioning formula for any married client(s) having significant funds in a qualified retirement plan – of one or both spouses - such as an IRA, 401(k), pension plan, or other qualified plans.

Our offices have used the pecuniary credit shelter formula for A/B Trust planning for almost as long as the unlimited marital deduction allowance became law through the federal 1981 ERTA legislation. However, pecuniary credit shelter formula clauses may cause unwanted tax liabilities if the trust estate of the first spouse to die possesses a significant portion of the total value of his estate in qualified plan funds and is funded to the credit shelter trust upon his decease.


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