Qualified-Terminable-Interest Property Law and Legal Definition

Qualified terminable interest property refers to property that is transferred by a qualified terminable interest property trust from a deceased spouse to the surviving spouse. Such transfer qualifies for marital deduction if the executor so elects, provided the spouse is entitled to receive all income in payments made at least annually for life and that no one has the power to appoint the property to anyone other than the surviving spouse. Under this trust, the assets are considered part of the surviving spouse’s estate and are therefore not subject to the estate tax on the decedent spouse’s estate.