Marital Deductions & Non-Citizen Spouses

A QDOT is a specific type of marital deduction trust that is designed to ensure that non-citizen spouses will eventually pay any taxes that may be due upon distribution of the principal from the trust, even if the surviving spouse resides outside of the United States. Without a QDOT, an estate would be immediately taxable. More specifically, the marital deduction typically allows the assets of an estate to be passed to a spouse without tax consequences. The marital deduction for property passing to a non-citizen spouse is generally not allowed without the existence of a Qualified Domestic Trust (QDOT). Special Requirements To ensure the taxes are eventually paid, there are certain required provisions: The trustee of the trust, or one of the co-trustees, must be a U.S. citizen or a domestic corporation of the U.S. The trust must contain a restriction that no principal will be distributed from the trust unless the U.S. citizen or domestic corporation trustee has the right to…

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