Part of the allure of estate planning is to help your family avoid having to pay taxes after your death on anything you leave to them. There are many ways to ensure that your heirs inherit tax-free with the most common being that you leave your estate to your spouse. Typically, a spouse will pay no estate taxes when property transfers to him or her. However, there is an exception that may apply to your situation.
According to Financial Planning, if you are a U.S. citizen, but your spouse is a foreign national, then your spouse cannot use the exemption to avoid estate taxes. The only exception is for people from certain countries that have agreements with the U.S. for tax-free options, but this will still not allow your spouse to completely avoid all taxes. It is often for only a portion of the taxes.
One thing you can do to avoid all taxation is create a qualified domestic trust, which allows your spouse to avoid taxes by just spending the income from the trust. He or she cannot spend the principal without paying taxes unless there is a hardship situation. You will have to appoint someone as the trustee who is a U.S. citizen.
One of the best options is for your spouse to become a U.S. citizen. However, your spouse may not wish to lose his or her citizenship in the other country. If dual citizenship is an option, then this could make this option more viable. However, your spouse would have to be a citizen before you die or you would have to set up a QDOT, which he or she could access after becoming a citizen tax free.