A spousal lifetime access trust, or SLAT, is an irrevocable trust that moves assets out of your estate while still giving your family indirect access through your spouse. You give up direct control of what you contribute, but your spouse can receive distributions from the trustee, and those funds can still support your household.
SLATs are a popular way to use today’s $15 million gift and estate tax exemption ($30 million for couples) before it shrinks.
One caution: If both spouses set up SLATs for each other, the IRS may view them as mirror images and unwind the tax benefits. This is the reciprocal-trust doctrine. An experienced estate planning attorney can help structure two SLATs with enough differences to stand on their own.
A financial advisor and estate attorney can help you decide if a SLAT fits your estate plan.
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