Is your spouse a U.S. citizen? If not, consider using a QDOT

Description

Abstract: The marital deduction allows for the transfer of property, either through lifetime gifts or bequests at death, to a spouse gift- and estate-tax free. But transfers to a spouse who is not a U.S. citizen may trigger immediate tax consequences. Fortunately, couples in this situation can take advantage of the deduction by using a qualified domestic trust (QDOT). This article looks at how QDOTs work and additional rules to be aware of. It also provides insights on how the 2010 estate tax repeal affects estate planning for noncitizen spouses.