DEFINITION of 'Qualifying Domestic Trust - QDOT'

A type of trust that allows taxpayers who are not U.S. citizens to claim the marital deduction for estate-tax purposes. Spouses without citizenship are not eligible for the marital deduction without a qualifying domestic trust. QDOTs are similar to QTIP trusts in that the marital deduction is conditional upon the inclusion of assets inside the trust.

BREAKING DOWN 'Qualifying Domestic Trust - QDOT'

Although establishing a QDOT is often easier and faster than applying for citizenship, this type of trust is not without risk. There are numerous provisions pertaining to this type of trust that must be obeyed carefully in order for the trust to remain valid. QDOTs apply only to spouses of decedents who died after November 10, 1988. At least one trustee must be either a U.S. citizen or domestic corporation that is authorized to retain estate tax out of the trust assets.

RELATED TERMS
  1. Marital Trust

    A fiduciary relationship between a trustor and trustee for the ...
  2. Trust Fund

    A trust fund is a fund comprised of a variety of assets intended ...
  3. A-B Trust

    A trust created by a married couple with the objective of minimizing ...
  4. Unlimited Marital Deduction

    A provision in United States Federal Estate and Gift Tax Law ...
  5. Qualified Terminable Interest Property ...

    A type of trust that enables the grantor to provide for a surviving ...
  6. Credit Shelter Trust - CST

    A type of trust that allows a married investor to avoid estate ...
Related Articles
  1. Financial Advisor

    Should You Put Your Faith In A Trust?

    Many institutions want a piece of your portfolio, but trusts can provide a one-stop shop.
  2. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
  3. Managing Wealth

    Surprising Ways a Trust Could Help Your Family

    Everything you always wanted to know about setting up trusts, in handy glossary form.
  4. Financial Advisor

    Irrevocable Trusts: New Trends You Need to Know

    Several improvements and additional provisions have been added to irrevocable trusts in recent years making them considerably more versatile than before.
  5. Retirement

    How To Set Up A Trust Fund In The U.K.

    A guide to the whys and wherefores of setting up this most versatile of estate-planning instruments in the United Kingdom.
  6. Managing Wealth

    How to Set Up a Trust Fund in Canada

    You don't have to be rich to make use of a trust fund. Rules can be complex; here's what you'll need to discuss with your lawyer.
  7. Financial Advisor

    Advisors: Tips for When to Employ Living Trusts

    Revocable living trusts accomplish estate planning objectives that aren't possible with a will. Here are some of the cases that show when to use a trust.
  8. Managing Wealth

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  9. Investing

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  10. Investing

    Unit Investment Trusts Market: 3 Trends in 2016

    Learn more about unit investment trusts (UITs), and discover some of the most common trends in the UIT market to date in the year 2016.
RELATED FAQS
  1. What is the difference between a revocable trust and a living trust?

    Learn how a revocable trust and living trust are two terms used to describe the same thing and what the key provisions are ... Read Answer >>
  2. What is the difference between revocable and irrevocable intervivos trusts?

    Learn what an inter-vivos trust is, the difference between an irrevocable and a revocable inter-vivos trust, and why it is ... Read Answer >>
Hot Definitions
  1. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  2. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  3. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  4. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  5. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  6. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
Trading Center