Alaska USA Trust Services Expands, Educates Members on QTIPs, Duel Trusts

ANCHORAGE, Alaska – The estate planning complexities that may come as a result of blended families and multiple marriages is one reason why Alaska USA Trust Services, a CUSO of Alaska USA FCU, is advising its members to consider a qualified terminable interest property trust or QTIP. A QTIP allows a person to designate where the assets will go after death, and not necessarily to the spouse. The spouse can receive a lifetime income and the children receive the trust principal but the results remain the same even if the spouse remarries, drafts a new will or experiences investment losses. Alaska USA Trust is advising members it can serve as the QTIP’s trustee. The trust company has also alerted its members to the status of the estate tax, which is scheduled for repeal in 2010. “Larger estates still need to deal with estate-tax planning until the repeal takes place and the repeal will last only one year,” according to Alaska USA Trust. “Unless Congress acts, the pre-2001 tax act rules will return in 2011.” Meanwhile, the current tax law allows any surviving U.S. citizen spouse to avoid all estate tax on any amount inherited from a deceased spouse but taxes may still be due later including after the surviving spouse’s death. Alaska USA Trust says one way to save more on taxes is to set up two trusts and divide the estate between them. One part of the estate is placed in a marital trust that qualifies for the unlimited marital deduction and the second part is placed in a residuary trust that takes advantage of the estate tax exemptions available under current law, according to the trust company. The entire estate then “escapes taxation just as it would if the marital deduction were used alone.” “Without the trusts, all of the surviving spouse’s assets would be taxable upon death except for the amount protected by that spouse’s own exemption. With the two-trust arrangement, none of the assets in the residuary trust are taxable, and the spouse’s maximum estate tax credit still shields part or all of the assets in the marital trust,” the trust company said. In related news, $2.6 billion Alaska USA FCU recently opened up a new, 92,000 square-foot center that will house Alaska USA Trust; Alaska USA Business and Commercial Lending; Alaska USA Insurance Brokers; and Alaska USA Mortgage Co. [email protected]