This passing is not automatic, as some think, and the procedure for passing depends on local law. But this form of ownership does have the advantage of allowing property to pass to the survivor without the delays of probate and free of court administration costs. It is an irrevocable trust. It can be revocable - that is, you can change your mind and have some or all of the trust property returned to you during your life. The pooled assets contributed by many donors are invested together by the trustee, and each year all the fund's net earnings are paid out as income to the beneficiaries - either the donors or others they named to receive the income.
Income is distributed according to the investment units in the fund assigned to each recipient.
By custom, it has come to be understood as the legal process whereby a dead person's estate is administered and distributed. The deceased spouse has established the ultimate disposition of the QTIP assets, rather than allowing them to be included, and taxed, in the surviving spouse's estate. The surviving spouse, during his or her lifetime, receives all income from the principal and, in some cases, has access to the principal. The life estate may be retained for one or more lives or for a term of years. The plan can be used with a second or vacation home.