Gift and Estate Planning for a Noncitizen Spouse: QDOTs and Preparing Form 706-QDT

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, September 2, 2021

Recorded event now available

or call 1-800-926-7926
Course Materials

This course will discuss tax consequences and planning for a noncitizen spouse. Our panel of trust and estate experts will explain how to take advantage of the unlimited marital deduction using a qualified domestic trust (QDOT) and prepare the corresponding Form 706-QDT.

Description

For a nonresident spouse, the estate tax marital deduction may be limited or not available. U.S. citizens are allowed a $11,700,000 lifetime exclusion from estate tax; nonresidents are offered $60,000. There is no gift tax marital deduction for transfers to a noncitizen spouse. However, the annual gift tax exclusion for gifts to a nonresident spouse is $159,000 in 2021 compared with the $15,000 annual per done exclusion for gifts made by citizens and residents. These limitations make planning for a noncitizen spouse crucial.

Putting assets in a QDOT with a U.S. trustee can allow noncitizens to claim the marital deduction for estate tax. However, these trusts come with an additional filing requirement. In addition to Form 1041 reporting, there may be a requirement to file Form 706-QDT. The 706-QDT is not necessarily filed annually. The trustee should file it when specific events occur, including when principal distributions are made (there is a hardship exception) or when the donor spouse dies.

Listen as our panel of trust and estate tax experts explains the substantial transfer tax savings opportunities for a noncitizen spouse, including maximizing the annual gift tax exclusion, establishing a QDOT, and the filing requirements for QDOTs.

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Outline

  1. Estate and gift tax concerns for a noncitizen spouse
  2. Gift tax exclusion
  3. Estate tax
  4. QDOTs
  5. Form 706-QDT
  6. Other planning techniques

Benefits

The panel will review these and other critical issues:

  • How to best utilize the $159,000 annual exclusion for gifts to a noncitizen spouse
  • When is Form 706-QDT required to be filed?
  • What taxpayers can benefit from setting up a QDOT?
  • What assets are the best candidates for a QDOT?

Faculty

Doyle, Jere
Jeremiah W. (Jere) Doyle, IV

Senior Vice President
Bank of New York Mellon

Mr. Doyle provides clients with integrated wealth management advice on how to hold, manage and transfer their...  |  Read More

Patterson, Jacqueline
Jacqueline Patterson

Partner
Buchanan & Patterson

Ms. Patterson specializes in tax, estate and financial transactions, with an emphasis on asset protection and...  |  Read More

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