Which statement correctly describes the purpose of a QDOT?

Which statement correctly describes the purpose of a QDOT?

• A. Dividing retirement assets upon death or divorce.
• B. Deferring estate taxes on property given to a non-U.S. citizen spouse at the donor's death.
• C. The marital transfer to be only in the form of an estate trust.
• D. Receiving the gift tax marital deduction for a gift to a non-U.S. citizen spouse.

Answer: (B)

A Qualified Domestic Trust (QDOT) exists to allow the unlimited marital deduction to apply when the surviving spouse is not a U.S. citizen, by deferring estate taxes on assets transferred at the first death. Placing the assets into a QDOT enables the decedent to treat the transfer as a marital bequest for tax purposes while postponing the tax obligation until the death of the surviving spouse. This defers the estate tax that would otherwise be due at the first death and provides for the noncitizen spouse under the trust terms, with required structures such as a U.S. trustee to satisfy IRS rules. Other options do not describe this mechanism: they don’t address deferring estate tax due to a noncitizen spouse or the specific use of a trust to preserve the marital deduction across citizenship boundaries.

A Qualified Domestic Trust (QDOT) exists to allow the unlimited marital deduction to apply when the surviving spouse is not a U.S. citizen, by deferring estate taxes on assets transferred at the first death. Placing the assets into a QDOT enables the decedent to treat the transfer as a marital bequest for tax purposes while postponing the tax obligation until the death of the surviving spouse. This defers the estate tax that would otherwise be due at the first death and provides for the noncitizen spouse under the trust terms, with required structures such as a U.S. trustee to satisfy IRS rules.

Other options do not describe this mechanism: they don’t address deferring estate tax due to a noncitizen spouse or the specific use of a trust to preserve the marital deduction across citizenship boundaries.