QDOT Trust

The Qualified Domestic Trust (QDOT) is similar to a marital deduction. It is available for transfers to a surviving spouse that is not a United States citizen. All property that would otherwise qualify for a marital deduction goes into the QDOT. A QDOT must meet the marital deduction qualifications as well as the following qualifications:

At least one trustee must be a U.S. citizen or a domestic corporation.
No distribution other than income may be made from the trust unless the trustee has the power to withhold or take out funds equal to estate or gift taxes imposed on the trust.

While the surviving spouse is alive, gift taxes are due on any distribution from the trust other than income. At the death of the surviving spouse, estate tax is due on any property remaining in the QDOT.

These additional gift and estate taxes due are calculated as if they were a part of the taxable estate of the deceased spouse. These taxes are in addition to the estate taxes already filed.