Death of U.S. citizen with a non-citizen spouse

webcite_99 · Post by **webcite_99** » Thu Jul 21, 2005 11:11 am

Three years ago, I married a Canadian citizen. I never created a will thinking that if I die in Illinois in-testate that she will get everything (which is pretty much what I would have my will say) so why bother. However, I recently discovered that if an American citizen dies, the money to a surviving non-citizen spouse does not get the spousal exemption and instead gets taxed as a gift tax. In the same article, however, it appears that there may be some kind of "qualified domestic trust" that I could set up and avoid the tax. We are going thru the immigration process now, but it will be another 3 ½ years before she becomes a (dual) citizen, so I wanted to explore setting up some kind of temporary estate structure that would protect us from big estate taxes between now and the time of naturalization.

I welcome any suggestions -- (the least expensive and easiest method is most desirable given that all will be moot in 3 ½ years)

Thanks,

Webcite_99

Rick

nelsona · Post by **nelsona** » Thu Jul 21, 2005 11:27 am

The tax treaty does give special allowince to cdn in the situation you describe, so it is not as dire as this article likely points out. However for larger estates, a qdot might be considered.

Qdots are expensive, so only consider for large estates, which would include any insuarnce payout.

But you should definitely have a will.

<i>nelsona non grata... and non pro</i>

webcite_99 · Post by **webcite_99** » Thu Jul 21, 2005 1:01 pm

Thanks Nelson.

I did read that: such a trust might actually be able to be set up after death, provided it's within nine months of the date of death, and the favorable tax results can still be obtained.

Is this true? and if so, do I need to set anything up now, in advance, to grant to someone the power to set up a qualified trust after the event of my untimely demise?

Rick

nelsona · Post by **nelsona** » Thu Jul 21, 2005 1:14 pm

Qdots are a product, so you'd best talk with a product salesman, keeping in mingd that salesmen... sell, first and foremost.

Talk it ovwer with the financial palnner and lawyer that will draw up your will.

I'm quite sure however, that after you [xx(], you will not be making any financial/tax/estate decisions[:)]

<i>nelsona non grata... and non pro</i>