The answer is yes; noncitizens can inherit property just as citizens can. So when you make your will or living trust, or name beneficiaries for your retirement accounts or life insurance policies, there is no problem with naming your noncitizen spouse.
What is a qdot election?
A qualified domestic trust (QDOT) allows a non-citizen surviving spouse of a deceased taxpayer to take advantage of the marital deduction on estate tax for any assets that are placed into the trust before the death of the decedent.
Can a non-US citizen be a beneficiary of a life insurance policy?
Yes, a non-US citizen can be a life insurance beneficiary. In cases where a non-US citizen is a beneficiary, you will want to provide as much information about the beneficiary to the carrier as possible.
Can a Qdot be terminated if the surviving spouse becomes an US citizen?
Q&A #4: If the surviving spouse becomes a US citizen, (a) can the trust be terminated? and (b) would additional estate tax be payable on termination? As a general rule, a QDOT can be terminated if the trust instrument so permits.
Who are the beneficiaries of a Qdot Trust?
When the surviving spouse dies, the remaining trust assets will be subject to US estate tax, and the trust assets will pass to the other beneficiaries under the QDOT trust agreement – often the couple’s children.
Can a non-US citizen create a Qdot?
If a QDOT is not created for the non-citizen spouse in those documents, he or she should at least leave assets to the surviving spouse, outright or in a trust which would have qualified for the estate tax marital deduction if the surviving spouse had been a US citizen.
Do you have to pay estate tax on a Qdot?
QDOTs are not exempt from estate tax, though, but are merely a means to defer tax. Upon the death of the surviving noncitizen spouse and certain other taxable events, the amounts transferred to a QDOT generally are subject to the Sec. 2056A estate tax.
