It’s important to have all estate planning documents in order to prepare for the passing of a spouse. This is especially true if one spouse is not a U.S. citizen, as they may not be able to take advantage of certain tax deductions, otherwise. Do you want to know what is a QDOT? Visit this website.

If your spouse is not a U.S. citizen but you want them to be able to claim the marital deduction if you die, you’ll need to know how a qualified domestic trust works. If you’re wondering, “What is QDOT?” and if you should use one, the following information will help.

What is QDOT?

QDOT stands for qualified domestic trust. This specific type of trust allows surviving spouses who are not U.S. citizens to take the marital deduction on state taxes if assets are included inside the trust. Normally, a surviving spouse can take this deduction on their state taxes, but if they are a non-citizen, they are not eligible for the marital deduction.

How does a qualified domestic trust work?

A qualified domestic trust helps non-citizen surviving spouses by allowing them to take advantage of the marital deduction on estate tax for the assets that are placed into the trust before the death of their spouse. Without this type of trust, surviving spouses who are not U.S. citizens would not qualify for the marital deduction.

As long as all requirements and provisions are complied with, a QDOT will preserve marital assets that are included in the trust. However, any assets that are not placed into the trust will not qualify for the marital deduction and will be subject to estate taxes.

Additionally, there are a few caveats: A QDOT only protects the assets of an individual who has passed away after November 10, 1998 and at least one trustee of a QDOT must be an American citizen or a domestic corporation authorized to retain estate tax.

Hire an estate planning lawyer for legal guidance

Thinking about your spouse’s death is not pleasant, but it’s important to plan for this to protect the financial health and well-being of the surviving spouse. Establishing a QDOT and understanding how it works in relation to your individual circumstances can be challenging without the assistance of an experienced and knowledgeable estate planning lawyer. If you or your spouse is a non-citizen, the best way to ensure one another’s care in the event of a death is to meet with an estate planning lawyer and establish the proper legal directives.

Read a similar article about how to prepare last will and testament here at this page.