qualified domestic trust

A qualified domestic trust ( QDOT ) is a trust created for a surviving spouse who is a non-U.S. citizen to qualify for the marital deduction . It allows a non-U.S. citizen married to a U.S. citizen to be eligible for an unlimited marital deduction that keeps the decedent 's estate from being taxed federally at the time of their death.

Under the Internal Revenue Code , the surviving spouse is not required to pay tax on the estate of the first deceased spouse if they are a U.S. citizen. A non-citizen surviving spouse, on the other hand, does not qualify and may instead retain the marital deduction for assets within that trust through a qualified domestic trust.

See: 26 U.S.C. § 2056(d)(2) .

[Last reviewed in March of 2022 by the Wex Definitions Team ]

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