This Memorandum is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser. The government's goal is to tax assets once at each generation. Therefore, an unlimited marital deduction generally exists, allowing all tax to be deferred at the death of the first spouse, regardless of the size of the estate.
Foreign citizenship causes a problem, in the opinion of the government.
Therefore, if the Surviving Spouse is a non-citizen, even a long time resident alien , the marital deduction applies differently. The Trustee of the QTIP Trust is typically the Surviving Spouse. The QTIP Trust allows the Surviving Spouse full lifetime use of the assets - at her death they pass to the beneficiaries of the Deceased Spouse. With a U.S. citizen Surviving Spouse, the QTIP Trust works perfectly. If Surviving Spouse is a U.S. citizen, no complications arise.