QDOT is an abbreviation for qualified domestic trust, which is a trust created for a surviving spouse who is a non-U.S. citizen to qualify for the marital deduction. It allows a non-U.S. citizen married to a U.S. citizen to be eligible for an unlimited marital deduction that keeps the decedent's estate from being taxed federally at the time of his or her death.
Under the Internal Revenue Code, the surviving spouse is not required to pay tax on the estate of the first deceased spouse if he or she is a U.S. citizen. A non-citizen surviving spouse, on the other hand, does not qualify and may instead retain the marital deduction for assets within that trust through a QDOT.
See: 26 U.S.C. ยง 2056(d)(2).
[Last updated in May of 2022 by the Wex Definitions Team]