What is a Qualified Domestic Trust (QDOT)?
A qualified domestic trust (QDOT) is a trust created to qualify for the federal estate tax marital deduction where the surviving spouse is not a US citizen. A QDOT is the only transfer that will qualify for the marital deduction for a decedent who leaves an alien spouse. The current tax laws prohibit surviving spouses who are not US citizens from claiming the marital deduction. The creation of a QDOT can provide for major asset protection to the non-US citizen surviving spouse. Without a QDOT, an estate would be immediately taxable. The marital deduction generally allows estate assets to pass to a spouse without tax consequences. There are a number of special requirements to ensure that these taxes are eventually paid. For example, the trustee of the trust, or one of the co-trustees, must be a US citizen or a domestic US corporation. No distribution may be made without the consent of the trustee. In addition, a QDOT election must be made on the decedent’s estate tax return. A QDOT can
