How a spousal lifetime access trust (SLAT) works
A SLAT lets one spouse make a permanent gift that reduces the taxable estate while the other spouse still has access to distributions from the trust during life. It is one of the most-used tools for couples who want to use today’s federal exemption without losing all access to the assets.
These are the questions that matter most when you’re thinking about a spousal lifetime access trust.
What is a spousal lifetime access trust?
It is an irrevocable trust one spouse creates for the benefit of the other spouse, and usually children. The gift uses the donor spouse’s federal exemption and removes the assets from the donor’s taxable estate.
The funding spouse
Donor spouse
Creates and funds the trust. Uses estate and gift tax exemption. Is not a beneficiary. The funded assets are removed from the donor’s taxable estate.
The receiving spouse
Beneficiary spouse
Can receive distributions for support, alongside children or other beneficiaries. Provides indirect household benefit during the marriage. Access ends at the beneficiary spouse’s death or divorce.
How does the beneficiary spouse still have access?
The trustee can distribute to the beneficiary spouse for support and the other purposes the trust permits. Because most couples share a household, those distributions benefit both spouses during the marriage.
The donor spouse is not a beneficiary, which is what keeps the assets out of the donor’s estate. But the practical effect during a stable marriage is that the family still has access to the money the SLAT holds.
What are the main risks of a SLAT?
A SLAT depends on a marriage staying intact and a beneficiary spouse staying alive. Both risks are addressable but they have to be understood up front.
If the beneficiary spouse dies first
Indirect access ends
Indirect household access through the marriage ends. Trust continues for the remaining beneficiaries. Can be partly addressed with life insurance, and sometimes mitigated by two reciprocal SLATs.
If divorce happens
Donor loses practical access
The beneficiary spouse remains the beneficiary. The donor spouse loses practical household access. Drafting can address what happens on divorce. Stability of the marriage matters before funding.
When does a SLAT make sense?
Five short choices. Brent reads your answer back to you at the end.
A 30-second guided quiz. Get a personal read on whether a SLAT fits.
How Brent helps you
- Walks through whether a SLAT is the right fit before recommending one
- Drafts the distribution standards and trustee provisions to match how you live
- Handles reciprocal-trust concerns if both spouses fund SLATs for each other
- Coordinates the SLAT with the rest of your plan so the tax picture stays clean
