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Qualified domestic trust
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A quick definition of Qualified domestic trust:
A Qualified Domestic Trust (QDOT) is a special type of trust created for a surviving spouse who is not a citizen of the United States. This trust allows the non-citizen spouse to receive an unlimited marital deduction, which means that the estate of the deceased spouse will not be taxed by the federal government. Normally, a U.S. citizen spouse would not have to pay taxes on their deceased spouse's estate, but a non-citizen spouse would not qualify for this benefit. By using a QDOT, the non-citizen spouse can still receive the marital deduction and avoid paying taxes on the estate.
A more thorough explanation:
A Qualified Domestic Trust (QDOT) is a type of trust that is created to allow a surviving spouse who is not a U.S. citizen to qualify for the marital deduction. This deduction helps to keep the decedent's estate from being taxed federally at the time of their death.
For example, if a U.S. citizen is married to a non-U.S. citizen and they pass away, the non-citizen spouse would not be eligible for the unlimited marital deduction that a U.S. citizen spouse would receive. However, if a QDOT is created, the non-citizen spouse can still receive the marital deduction for assets within the trust.
The QDOT is governed by the Internal Revenue Code, which states that a surviving spouse who is a U.S. citizen is not required to pay tax on the estate of the first deceased spouse. However, a non-citizen surviving spouse does not qualify for this exemption and must instead use a QDOT to retain the marital deduction.
Qualified Domestic Relations Order (QDRO) | Qualified immunity