When Both Spouses Are U.S. Citizens

When both spouses are U.S. citizens, transfers between spouses generally qualify for the unlimited marital deduction. As a result, assets passing to a surviving spouse are typically not subject to federal estate tax at the first spouse's death.

In addition, each spouse may be entitled to a substantial federal estate tax exemption. As of 2026, the federal estate tax exemption is approximately $15 million per person, meaning that a married couple may be able to transfer approximately $30 million to their heirs without incurring federal estate tax, assuming all applicable requirements are met. As a result, federal estate tax affects only a relatively small percentage of families.

When the Surviving Spouse Is Not a U.S. Citizen

Different rules apply when the surviving spouse is not a U.S. citizen. The unlimited marital deduction generally is not available for transfers to a non-citizen surviving spouse. However, the deceased spouse's federal estate and gift tax exemption may still be available. As of 2026, that exemption is approximately $15 million, although the amount is subject to change under future legislation.

QDOT: A Planning Tool for Non-Citizen Spouses

A Qualified Domestic Trust (QDOT) may allow estate taxes that would otherwise be due at the first spouse's death to be deferred until a later date.

Under a QDOT arrangement, distributions of principal may trigger federal estate tax consequences. For this reason, QDOTs are generally used only in specific situations and require ongoing administration.

Is a QDOT Necessary?

.Whether a QDOT should be considered depends on the size and composition of the estate, the citizenship status of the spouses, and the federal estate tax laws in effect at the time.

In certain circumstances, if the surviving spouse becomes a U.S. citizen and satisfies applicable legal requirements, the estate may qualify for tax treatment that would otherwise be unavailable.

Important Disclaimer

This article is provided for general informational purposes only and does not constitute legal, tax, or financial advice. Estate tax laws are complex and subject to change. Questions regarding tax matters should be directed to a qualified CPA, tax advisor, or other tax professional.