Tax and residency

Qualified Domestic Trust

Also called QDOT, qualified domestic trust, Section 2056A trust.

A qualified domestic trust is the trust described in 26 U.S.C. 2056A that preserves the estate tax marital deduction where the surviving spouse is not a US citizen, and it defers the tax until the property leaves the trust rather than cancelling it.

What it decides

26 U.S.C. 2056(d)(1) denies the marital deduction outright when the surviving spouse is not a citizen, so a couple holding green cards loses the unlimited spousal transfer that citizen couples take for granted, and 2056(d)(2)(A) restores it for property passing to a QDOT. Under 2056A(a) the trust instrument must require at least one trustee to be an individual citizen of the United States or a domestic corporation, and must bar any distribution other than a distribution of income unless that trustee can withhold the tax. 2056A(b)(1) then taxes distributions made before the surviving spouse dies and the value remaining at that death, while 2056A(b)(3) spares distributions of income and distributions on account of hardship. The executor elects on the estate tax return, and 2056A(d) allows no election on a return filed more than one year after the due date including extensions. Two escapes matter: 2056(d)(4) disapplies the whole problem if the spouse naturalises before the return is made and was a US resident throughout since the death, and lifetime giving runs on a separate track under 2523(i), which gives no unlimited deduction but a larger annual exclusion, $194,000 for 2026.

Governed by 26 U.S.C. 2056(d)(1) and (d)(2)(A) for the disallowance and the QDOT exception, 2056(d)(4) for the naturalisation cure; 2056A(a) for the trustee and withholding conditions, 2056A(b)(1) and (b)(3) for the charge and its income and hardship exceptions, 2056A(d) for the one year election deadline; 26 U.S.C. 2523(i) for lifetime gifts to a non-citizen spouse, with the $194,000 figure for 2026 from Rev. Proc. 2025-32 section 4.42(2). The uscode.house.gov 2056A page carries the trust rules but not the disallowance in 2056(d), which sits on a separate page.

Where this is explained properly

Pages here that go into qualified domestic trust rather than mentioning it.

U.S. Estate Tax Implications for Wealthy EB-5 Investors

Related terms

US estate tax and domicileUS estate tax reaches the worldwide estate of a decedent who was a US citizen or a US domiciliary, and domicile is acquired by living in a place with no definite present intention of later leaving it, which a green card may evidence but does not by itself decide.
Nonresident alien and resident alienResident alien and nonresident alien are the two United States income tax statuses a non-citizen can hold: a resident alien is taxed on worldwide income and files Form 1040, while a nonresident alien files Form 1040-NR and is taxed only on income effectively connected with a United States business and on United States source passive income.
NaturalizationNaturalization is the process by which a lawful permanent resident becomes a US citizen, requiring under 8 U.S.C. 1427(a) five years of continuous residence after lawful admission for permanent residence, physical presence for at least half of that time, three months in the state where the application is filed, and good moral character.
Pre-immigration tax planningPre-immigration tax planning is the practitioner label for steps an intending immigrant takes before the residency starting date, after which the same steps are taxed as those of a United States resident.

Checked against primary sources on 10 August 2026. Back to the glossary