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This type of trust is provided for in a will or revocable trust and is designed to make optimal use of the available tax exemptions of a married couple. If the first spouse dies, his or her remaining estate tax exemption amount will fund the bypass trust. The assets will not be included in the estate of the surviving spouse and will ultimately pass to lower generations free from estate taxes. • Qualified terminable interest property trust (QTlP). A QTIP marital trust is also generally created in a will or revocable trust for the benefit of a surviving spouse. The surviving spouse receives income for life, and the balance is typically left to the decedent's children on the surviving spouse's death. It takes advantage of the estate tax marital deduction, provides an income for the surviving spouse, but controls who the ultimate beneficiaries will be. • Irrevocable life insurance trust (ILIT). An ILIT can remove life insurance proceeds from your taxable estate. The proceeds may be used to pay estate costs and provide beneficiaries with tax-free insurance proceeds. Since the trust is the policy owner, you forfeit the right to borrow against the policy or change beneficiaries. ILIT proceeds can be very useful and, for example, provide financial support to beneficiaries until they can sell an illiquid asset. Put your entire financial life into perspective. True wealth management means understanding what's important to you and the causes and goals you find meaningful. It also means communicating your wishes and reviewing your estate planning documents with your family. 1 UBS Investor Watch, 3Q 2014. 2 State estate taxes may also apply. Authored by UBS Financial Services Inc., provided courtesy of Anthony Cristiano, First Vice President and Financial Advisor "UBS Financial Services Inc. and its affiliates do not provide legal or tax advice. Clients should consult with their legal and tax advisors regarding their personal circumstances. As a firm providing wealth management services to clients, we offer both investment advisory and brokerage services. These services are separate and distinct, differ in material ways and are governed by different laws and separate contracts. For more information on the distinctions between our brokerage and investment advisory services, please speak with your Financial Advisor or visit our website at ubs. com/workingwithus. ©UBS 2015. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA. Member SIPC" VUE ON FORTUNE 225 RIVER RD, EDGEWATER, NJ 07020 201.992.8001 | www.eighteeneight.com/edgewater-nj

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