Assume, for this question only, that Kenny and Melissa were married today. They

Question

Assume, for this question only, that Kenny and Melissa were married today. They went straight to Kenny’s lawyer’s office to execute new wills and a QDOT trust document. On the way home from executing a valid will leaving all assets to Melissa, Kenny and Melissa were in a serious car accident. Kenny was comatose for several days before dying. His unpaid medical expenses were $150,000; Melissa had medical expenses for the accident of $10,000. The day after Kenny died, Melissa gave Kenny’s three children and three grandchildren each $22,000 then left for France to stay with her mother. Prior to Kenny's death, Kenny and Melissa gave Kenny's mother $60,000. If a QDOT is funded would the estate be able to use a marital deduction for the assets passing to Melissa, a non-US citizen spouse?

A) Yes, a marital deduction would be available.

B) No, the marital deduction would not be available.

Explanation / Answer

Martial deduction trust is a trust in which one spouse can transfer his/her assets to its spouse with a lower tax or no tax basis.

If the spouse is non US citizen and the trust has status of qualified domestic trust (QDOT) then martial deduction at the time of death of spouse will be allowed to non US citizen spouse.

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