Bankrate's financial glossary
Did you run across an unfamiliar term when applying for a mortgage, credit card
or auto loan? Find the meaning here, along with definitions of other financial words
and phrases, in Bankrate.com's financial glossary.
Quit claim deed
The formal document by which a claim in property is denied. Often used to clear a cloud on title.
Qualified adoption expenses
For the adoption credit, reasonable and necessary expenses for adopting your child, including such expenses as adoption fees, attorney fees and other expenses. However, expenses paid for a surrogate parenting arrangement or expenses paid to adopt your spouse's child are not allowed.
Qualified domestic trust
(QDOT) A trust arrangement where a noncitizen spouse can take advantage of the unlimited marital deduction. The assets placed in a QDOT are taxed when the surviving spouse dies or receives a nonhardship distribution of trust assets during his lifetime.
Qualified Medicare beneficiary
Someone living below the federal poverty guidelines for whom the government is required to pick up premiums, deductibles and co-pay costs for Medicare Part B (basic medical) coverage.
Qualified personal residence trust
(QPRT) A trust in which the grantor basically passes ownership of her home to heirs at some future date. If the grantor dies before that time, the house is still included in the estate. If she dies after the term of the trust, then the house is not included in the estate -- and will not be included in calculating the estate tax payable. One condition that may be included in the trust terms is that if the home passes to the beneficiaries at the end of the trust term and the grantor wishes to continue residing in the residence, the child or children will lease the home back to the creator of the trust.
Qualified retirement plan
A retirement plan approved by the IRS that allows for tax-deferred accumulation of investment income. Individual retirement accounts, Keogh plans and pensions are examples of qualified retirement plans.
Qualified Terminable Interest Property trust
(QTIP) A trust that allows the creator, or grantor, to control what happens to the assets in the trust after the surviving spouse dies. The surviving spouse must receive all trust income and after he or she dies, the trust corpus passes to the beneficiaries chosen by the first spouse that had died. This trust is commonly used in cases where there are children from a previous marriage.
As calculated by lenders, the percentage of income that is spent on housing debt and combined household debt. The first qualifying ratio, called the front ratio, is the percentage of monthly before-tax income that goes toward a house payment. The back ratio is the sum of the house payment and all other monthly debt -- credit cards, car payments, student loans and the like -- divided by before-tax income.
You must not remarry and have a dependent child living with you to qualify for this status. This status is available for up to two years following the year of your spouse's death.