If your spouse isn’t a U.S. citizen, estate planning can get more complicated—and the financial consequences of getting it wrong can be steep. Without proper planning, your loved one could face both tax surprises and unnecessary legal roadblocks.
This blog is for expat and international families living in New York who want to ensure their spouse is protected—and that their estate doesn’t get eaten up by taxes. We’ll walk you through what makes estate planning for non-citizen spouses unique, what tools are available, and what to avoid if you want to preserve both control and peace of mind.
Why a Non-Citizen Spouse Can’t Use the Marital Deduction
One of the most common mistakes families make is assuming that all assets can pass to a surviving spouse without estate tax consequences. In the U.S., that’s only true if your spouse is a U.S. citizen. Otherwise, the unlimited marital deduction—one of the core pillars of tax-efficient estate planning—doesn’t apply.
Because assets left to a non-citizen spouse are still covered by the regular, quite generous lifetime exemption for U.S. residents, the limitation on the marital deduction will only affect individuals whose assets exceed the exemption amount. For example, if you die with an estate of less than the $13.99 million (in 2025) lifetime exemption (and you haven’t given away any assets during your life), the limitation on the marital deduction would have no effect on your family.
Married couples with substantial assets and in which one spouse is not a U.S. citizen should plan to minimize the effect of the non-citizen spouse rules. Couples in this situation should be careful about co-mingling their assets, since it can result in a reduction in the lifetime exemption of the citizen spouse.
What Is a QDOT—and When Do You Need One?
A Qualified Domestic Trust (QDOT) is a legal tool specifically designed to address this problem. It allows you to leave assets to a non-citizen spouse in a way that qualifies for the marital deduction, deferring estate tax until much later.
Key facts about QDOTs:
- At least one trustee must be a U.S. citizen or a U.S.-based financial institution.
- The trust allows income to flow to the surviving spouse, while deferring the estate tax until principal distributions are made—or until the spouse dies.
While powerful, QDOTs are also highly technical. They must be structured with care to meet IRS requirements. That’s why we advise anyone married to a non-citizen to consult with a qualified estate attorney early in the planning process.
Other Planning Strategies to Consider
While QDOTs are often the cornerstone of estate planning for non-citizen spouses, they’re not the only option. Depending on your situation, other tools can also help reduce exposure and increase flexibility:
- Annual gifting: You can give up to $190,000 (as of 2025) per year to a non-citizen spouse without using up your lifetime exemption. This can be a powerful strategy over time.
- Spousal Lifetime Access Trusts (SLATs): These allow one spouse to gift assets into a trust while keeping indirect access via the beneficiary spouse.
- Dual-jurisdiction planning: If you or your spouse have property or income abroad, you’ll need to coordinate U.S. and foreign estate laws to avoid conflict or double taxation.
This is one of the most complex areas of estate law. The combination of federal tax rules, state-level estate taxes, and cross-border legal systems means there’s no one-size-fits-all solution. Working with both a U.S.-based estate attorney with international expertise is the best way to build a comprehensive plan.
Real Risks of Doing Nothing
It’s easy to delay these conversations, especially if your family is healthy and young. But the reality is that failure to plan can lead to:
- Immediate estate taxes upon the citizen spouse’s death
- Delays in accessing essential funds
- Legal confusion between countries of residence and citizenship
- Loss of wealth intended to care for your surviving spouse or children
As highlighted in our blog on what happens when you die without a will, New York’s default laws do not work in favor of families with international dynamics. Even families with modest wealth should consider these risks seriously.
Ready to Plan Ahead?
If you or your spouse is not a U.S. citizen and you live in New York, now is the time to take action. At The Village Law Firm, we specialize in estate planning for international and cross-border families. We’ll help you build a customized plan that protects your spouse, preserves your legacy, and gives your family the clarity they deserve.
→ Schedule your complimentary call today to protect your loved ones with confidence.
FAQs
What happens if I leave everything to my non-citizen spouse without a QDOT?
Your estate may owe taxes immediately upon your death, and your spouse may not have unrestricted access to the assets. This can cause financial hardship and tax exposure.
Can my spouse become a U.S. citizen later and fix this?
Becoming a citizen after your death can eliminate the estate tax only if your naturalization is completed within nine months of your death. It can subsequently eliminate the tax on assets distributed from a QDOT to the surviving spouse. What’s the difference between a QDOT and a regular trust?
A QDOT is designed specifically for non-citizen spouses and must meet strict IRS rules. Other types of trusts may not qualify for the marital deduction, which is the key issue in cross-border planning.
