The unlimited marital deduction under IRC §2056, “Bequests, etc., to surviving spouse” lets you leave any amount to a citizen spouse free of estate tax. The catch: leaving everything outright also hands the survivor total control to spend it, remarry, and redirect your half to a new family—the exact blended-family failure the chapter warned about earlier. The Qualified Terminable Interest Property (QTIP) trust solves both at once.
A QTIP ( IRC §2056(b)(7)) pays the surviving spouse all trust income for life and may give access to principal, which qualifies the trust for the marital deduction so no tax is due at the first death. But you—not the survivor—name who receives the remainder when the spouse dies. That is how you provide for a second spouse for life while guaranteeing the principal lands with your own children. The trade-off is that QTIP assets are included in the survivor’s estate at the second death ( IRC §2044), so the tax is deferred, not erased—and the assets get a second basis step-up, which is often the point.
In practice these combine into the classic structure that splits a couple’s estate at the first death:
Funded with the amount needed to defer all tax via the marital deduction. Income to the survivor for life; included in the survivor’s estate; gets a second step-up.
Funded up to the deceased spouse’s exemption. Excluded from the survivor’s estate, so all future appreciation escapes tax at the second death (section “Bypass Trusts”). No second step-up.
The survivor’s own share, fully theirs.
The QTIP election is made return-by-return on Form 706, which gives the executor a powerful post-mortem lever (section “Post-Mortem Planning: The Levers You Pull After Death”): fund the bypass trust only to the extent it helps, and QTIP the rest. A separate reverse-QTIP election ( IRC §2652(a)(3)) lets you keep the deceased spouse’s GST exemption attached to QTIP assets so it is not wasted.
A Worked Example Frank dies in 2026 with a $20 million estate. It is his second marriage: he has two children from his first and wants his wife Susan supported for life, but the principal to land with his kids, not Susan’s children or some future husband. His plan splits the estate at death:
Estate tax at Frank’s death: $15 million covered by the exemption, $5 million by the marital deduction, for a total of zero. Now compare the lazy alternative—leaving the whole $20 million to Susan outright. That also produces zero tax at Frank’s death (unlimited marital deduction), but Susan can rewrite her will and leave every dollar to her own children, disinheriting Frank’s. The QTIP buys the same tax result while removing that option.
The two trusts then diverge at Susan’s death. Say the assets have grown: the bypass trust to $21 million, the QTIP to $7 million. The bypass trust passes to Frank’s children outside Susan’s estate—its $6 million of growth never taxed, though it gets no second step-up. The $7 million QTIP is pulled into Susan’s estate under IRC §2044 (covered by her own $15 million exemption, so likely still no tax) and does get a second basis step-up, wiping out the gain for the children. Frank provided for his widow, guaranteed his bloodline, deferred all tax, and captured a step-up where it counted. If grandchildren were the remainders, the reverse-QTIP election would have preserved Frank’s GST exemption on that $5 million as well.
The Non-Citizen Spouse Trap: QDOT The marital deduction is not available when the surviving spouse is not a US citizen—Congress assumes a non-citizen may leave the country with the assets before the IRS can tax them at the second death. To defer the tax anyway, the property must pass to a Qualified Domestic Trust (QDOT) under IRC §2056A: at least one trustee must be a US citizen or domestic corporation, the trust must withhold estate tax on most principal distributions during the spouse’s life, and large QDOTs must post security or use a bank trustee. A non-citizen spouse can also become a citizen before the return is filed and sidestep the QDOT entirely. This applies regardless of your citizenship; it turns on the survivor’s. See the broader treatment of mixed-citizenship couples in section “Titling and Beneficiary Designations”.