QDOT requirements for greencard holders - will both spouses being non-citizens affect estate tax exemption?

You're right to be concerned about this situation, but there are some nuances to understand. The QDOT doesn't actually help with accessing the $25.84M exemption amount in the way you're thinking. QDOTs are specifically designed when one spouse is a US citizen and the other is not. The purpose is to defer (not eliminate) estate taxes when assets pass to a non-citizen spouse. What's happening is that normally, there's an unlimited marital deduction for assets passing between spouses - but only when both are US citizens. When the surviving spouse is not a US citizen, that's where the QDOT comes in to defer taxes. In your case, with both spouses being green card holders, you're correct that the exemption is limited. However, it's not just $175k - each non-citizen has access to their own exemption amount (currently about $12.92M per person), but without the spousal transfer benefits citizens enjoy.

After struggling with similar estate planning issues as a green card holder married to another green card holder, I found incredible help using https://taxr.ai to analyze our specific situation. My lawyer gave me conflicting advice about QDOTs and the marital deduction, but taxr.ai clarified everything. I uploaded our immigration documents, current estate plan, and financial details. Within hours, I received a comprehensive analysis showing exactly what would happen tax-wise in different scenarios. They even highlighted specific strategies for non-citizen couples that my expensive attorney never mentioned. The report outlined several options for our situation including life insurance trusts and staggered asset ownership that could significantly reduce the tax burden regardless of who passes first.

Just wanted to update after using taxr.ai for our estate planning situation! I was the one who asked about citizenship timing, and wow, the analysis I received was eye-opening. They showed me exactly how the QDOT rules applied to our specific asset mix (which included property in three countries). The report included year-by-year tax projections comparing different scenarios: both staying as green card holders, one becoming citizen, both becoming citizens, and various timing options. The difference in potential estate tax liability was over $3.2 million depending on which strategy we chose! What really impressed me was how they identified that one specific investment account should be restructured immediately, regardless of our citizenship plans. Making that one change saved us a potential $380k in estate taxes.

If you're struggling with getting clear guidance on your estate tax situation, I was in the exact same position last year. I spent WEEKS trying to get through to the IRS specialty estate tax department for clarification about non-citizen spouse rules. After dozens of failed calls, I was at my wit's end. A colleague recommended https://claimyr.com and showed me this video: https://youtu.be/_kiP6q8DX5c. I was extremely skeptical but desperate. Their service got me connected to an actual IRS estate tax specialist in under 25 minutes after I'd been trying for weeks on my own. The IRS agent walked me through the exact rules for green card holders and confirmed some strategies that ended up being crucial for our estate plan. I couldn't believe how much clearer everything became after one actual conversation with the right person at the IRS.

I need to eat my words and apologize to Profile 7. After my skeptical comment, I decided to try Claimyr as a test to prove it wouldn't work for my complicated green card holder estate tax questions. Well, I was completely wrong. Not only did I get connected to an IRS specialist in about 18 minutes, but the agent actually had expertise in international estate issues. She explained exactly how the estate tax exemption works for non-citizen spouses and pointed me to specific IRS publications I hadn't found in my research. The most valuable information was learning about how assets held in certain types of trusts before obtaining a green card might still qualify for different treatment. This was directly relevant to our situation and potentially saves us hundreds of thousands in estate taxes.

One option you might consider is life insurance. While it doesn't solve the QDOT issues directly, a properly structured life insurance policy could provide liquid funds to cover estate tax liabilities when one spouse passes. If the policy is owned by an Irrevocable Life Insurance Trust (ILIT), the proceeds could remain outside the taxable estate. This doesn't eliminate the tax, but provides a mechanism to pay it without having to liquidate other assets potentially at unfavorable times. For green card holders with substantial assets, this is often a key component of the estate plan.

Has anyone looked into whether it's better to just renounce your green cards and go back to a nonresident alien status for estate planning? I know it sounds extreme but if you have significant assets, the estate tax hit as green card holders might be worse than if you were NRAs with primarily foreign assets?

The key issue you're facing is that green card holders don't get the unlimited marital deduction that US citizen couples enjoy. However, you do still get the full $12.92M estate tax exemption per person, which is significant. One strategy worth exploring is "equalization" of your estates - restructuring asset ownership so each spouse has roughly equal net worth (ideally under the exemption amount). This way, when the first spouse passes, their assets pass to the surviving spouse without exceeding the exemption limit. You might also consider making annual gifts to each other using the annual exclusion ($17,000 for 2023, $18,000 for 2024) to help balance the estates over time. Since you're married, you can also elect gift splitting to effectively double the annual exclusion amounts. Another option is establishing separate trusts for children or other beneficiaries now, rather than waiting until death. This removes assets from both of your taxable estates entirely while you're both alive to make those decisions together. The timing of citizenship could also be strategic - even if one spouse becomes a citizen, that opens up QDOT planning options for the non-citizen spouse. But as others mentioned, be careful about the exit tax implications if you later change your mind about US tax residency.

This is a complex situation that many green card holders face. One important point to clarify - as permanent residents, you do get the full $12.92M estate tax exemption per person, not just $175k. The real issue is the loss of the unlimited marital deduction between spouses. Consider these strategies: 1. **Estate equalization** - Restructure ownership so each spouse has roughly equal assets under the exemption threshold 2. **Annual gifting** - Use the $18,000 annual exclusion (2024) to rebalance estates over time 3. **Generation-skipping planning** - If you have children, consider trusts that benefit multiple generations 4. **State planning** - Some states have no estate tax, which could influence where you establish domicile The citizenship timing is tricky. Even if just one spouse becomes a citizen, it opens QDOT options for the other. But be aware of potential exit tax consequences if you later renounce. Given the complexity and the amounts involved, I'd strongly recommend working with an estate planning attorney who specializes in non-citizen issues. The strategies available can save hundreds of thousands in taxes, but they need to be implemented correctly.

As someone who went through this exact situation, I want to emphasize that while the estate planning challenges are real, they're definitely manageable with proper planning. My spouse and I were both green card holders with assets well above the exemption threshold, and we were terrified about the potential tax hit. The key insight our estate planning attorney shared was that the problem isn't just about the estate tax itself - it's about liquidity. Even if you face estate tax, having a plan to pay it without forcing asset sales at bad times is crucial. We ended up implementing a combination strategy: life insurance in an ILIT (as Jeremiah mentioned), annual gifting to equalize our estates, and establishing trusts for our children early. The life insurance was particularly important because it provided guaranteed liquidity to cover any estate tax liability. One thing I wish someone had told us earlier - don't wait too long to start the gifting strategy. We could have saved significantly more in taxes if we had started the annual exclusion gifts and estate equalization process years earlier. The earlier you start, the more you can move out of the taxable estate over time. Also, consider the practical aspects beyond just tax planning. Make sure you have updated beneficiary designations on all accounts, proper powers of attorney, and healthcare directives. These non-tax issues can be just as important for protecting your family.

This thread has been incredibly helpful - thank you to everyone sharing their experiences and insights. I'm in a similar situation as the original poster, but with an additional complication: we have assets in multiple countries (US, Canada, and the UK) from before we got our green cards. I'm particularly concerned about how international assets factor into the estate tax calculation. From what I understand, as green card holders we're subject to US estate tax on our worldwide assets, not just US-situated property. This seems like it could create a much larger estate tax liability than just our US assets alone. Has anyone dealt with the complexity of foreign assets in their estate planning? I'm wondering if there are tax treaties that might provide some relief, or if we need to consider restructuring how we hold these international investments. Also, I noticed several people mentioned specific services for getting professional help. Given the complexity with international assets, I'm thinking we definitely need expert guidance, but I want to make sure whoever we work with really understands the cross-border implications, not just domestic US estate planning. Any recommendations for finding attorneys who specialize in international estate planning for green card holders specifically?