What Is a Qualified Domestic Trust (QDOT)?
A Qualified Domestic Trust (QDOT) is a US estate-tax trust which preserves the marital deduction for property left to a non-citizen surviving spouse.
Also known as: QDOT, QDOT Trust.
How Qualified Domestic Trust (QDOT) works
A Qualified Domestic Trust (QDOT) is a trust meeting section 2056A of the Internal Revenue Code, used when a deceased person's surviving spouse is not a US citizen, because the federal estate tax marital deduction is otherwise generally unavailable for property passing to such a spouse. At least one trustee must be an individual US citizen or a domestic corporation, and distributions other than income require that trustee to hold the right to withhold the deferred tax. The executor makes a timely QDOT election, and estate tax is deferred rather than removed: principal distributions during the spouse's lifetime, other than hardship distributions, and property remaining at the spouse's death are generally taxed. Regulations, treaties and later citizenship affect outcomes.
Qualified Domestic Trust (QDOT) vs Trust
Unlike an ordinary Trust, which may serve many purposes, a Qualified Domestic Trust exists to defer US estate tax on property left to a non-citizen spouse and carries statutory trustee and withholding conditions.
Example
Illustrative example: A US citizen in Country A dies leaving investments to a spouse who holds only Country A citizenship. The executor places the assets in a QDOT with a US trustee; income paid to the spouse falls outside the deferred estate tax, while a later principal distribution for a non-hardship purpose generally triggers it.
Common misconception
Myth: Assets left to a spouse are always free of US estate tax.
Reality: The unlimited marital deduction generally applies only where the surviving spouse is a US citizen, so a non-citizen spouse typically needs a Qualified Domestic Trust or another statutory route for deferral.
Frequently asked questions
Why is a QDOT needed for a non-citizen spouse?
A Qualified Domestic Trust is needed because the US estate tax marital deduction is generally disallowed for property passing to a non-citizen surviving spouse unless a QDOT or another recognised arrangement is used.
When is estate tax due on a QDOT?
Estate tax on a Qualified Domestic Trust generally falls due on principal distributions made during the surviving spouse's lifetime, other than hardship distributions, and on property remaining in the trust at the spouse's death.
Related terms
- Estate Tax — Tax the QDOT defers rather than removes
- Trust — General legal arrangement the QDOT adapts
- US Person — Citizenship status deciding marital deduction access
- Gift Tax — Lifetime transfers to non-citizen spouses follow separate rules
- Double Tax Treaty (DTT) — Estate tax treaties may alter the outcome
Related guides
- Global tax reform and US digital nomads — US tax issues for citizens living abroad
- US expat tax reform debate — Policy debate on US expat taxation
Sources
Last verified: 2026-10-09. This entry is general information, not tax or legal advice; rules vary by country and change over time.
