When properly used by a citizen, the unlimited marital deduction defers all estate taxes until both spouses have died. No matter which spouse dies first, all assets left to the surviving spouse pass without estate taxes. Resident aliens can only use the unlimited marital deduction if there are legal assurances that the assets will not be removed from the US during the surviving spouse s lifetime. The QDT is legally required to have at least one Trustee who is a US citizen or a domestic corporation. The surviving spouse can consume any income generated by QDT, but cannot withdraw the inherited assets except under special conditions.
Estate taxes are then due after the second death.
This break is available to both citizens and resident aliens. Either option requires that you visit a qualified estate planning attorney. A QDT must follow very specific legal guidelines to offer any tax relief. After all, the estate tax confiscates assets you ve already paid incomes taxes on. Interestingly, many members of Congress feel the time is ripe to revoke the federal estate tax altogether.