Qualified domestic trust

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Qualified Domestic Trust

A trust into which the trustor deposits funds and other assets to provide for a surviving, non-U.S. citizen spouse while also maintaining control of what happens to those assets after the surviving spouse dies. In a Q-DOT, the trustor names his/her surviving spouse as beneficiary and provides that income and/or principal from the trust shall pass to that spouse upon the trustor's death. This enables the surviving spouse to avoid estate taxes to which the non-American spouse would otherwise be subject. See also: Q-TIP.

Qualified domestic trust (QDOT).

If your spouse isn't a US citizen and your estate is large enough to risk being vulnerable to estate taxes, you can use a qualified domestic trust (QDOT) to allow your spouse to enjoy the benefit of the marital deduction until his or her own death.

In short, the marital deduction means that one spouse can leave the other all his or her assets free of estate tax. The inherited assets become part of the estate of the surviving spouse, and unless the combined value is less than the exempt amount, estate tax could be due at the death of that spouse.

The difference, with a QDOT, is that at the death of the surviving, noncitizen spouse, the assets in the trust don't become part of his or her estate, but are taxed as if they were still part of the estate of the first spouse to die. Income distributions from the trust are subject to income tax alone, but distributions of principal may be subject to estate tax.

References in periodicals archive ?
The legal rules around QDOTs are complicated and clients must consult with an experienced estate planning attorney.
a) antibody fluorochrome complexes (eg Qdots, Alexa fluorochromes, PE-based tandem fluorochromes APC based tandem fluorochromes etc.
The Qdots studied in this work are used to label receptors on the surface of lymphocytes and other biological cells.
Remarkably, after 15 years of research, the interest and efforts in engineering multifunctional Qdot probes are still growing, because of Qdots' combination of superior optical properties, the unique size and surface effect of nanomaterials in biological systems, the advantages offered by optical imaging, and the challenges of understanding and solving the nanotoxicity problem.
Special rules apply to a qualified domestic trust (QDOT); the earliest date on which the decedent's DSUE amount may be included in the applicable exclusion amount of the surviving spouse is the date of the occurrence of the final QDOT distribution, the death of the surviving spouse, or the earlier termination of all QDOTs for that surviving spouse: The decedent's DSUE amount may be applied to the surviving spouse's taxable gifts made in the year of the surviving spouse's death.
All QDOTs for the benefit of a surviving spouse are aggregated for purposes of the $2,000,000 threshold.
law and the special security requirements for QDOTs having gross assets in excess of $2 million.
Coated with antibodies or other biomolecules, Qdots can bond with and illuminate the individual biological targets of a researcher's choice, such as genes, nucleic acids, proteins, small molecules, and cancer cells.
Although QDOTs have certain other technical advantages, there are a number of disadvantages, such as:
For the purpose of determining if the $2 million threshold has been exceeded, if more than one QDOT is established for the surviving spouse, the fair market value of all the QDOTs are aggregated.