How a SLAT Can Help You Protect Wealth and Reduce Estate Taxes
If you're looking for smart, tax-efficient ways to pass on your wealth and protect your legacy, a Spousal Lifetime Access Trust (SLAT) could be one of the most powerful estate planning tools available today. In this article, we’ll walk you through what a SLAT is, how it works, and why many high-net-worth families are using them as part of their long-term estate and tax planning.
What Is a Spousal Lifetime Access Trust (SLAT)?
A Spousal Lifetime Access Trust, or SLAT, is an irrevocable trust that allows one spouse to gift assets for the benefit of the other spouse. The goal is to remove those assets from the taxable estate — which can result in significant estate tax savings — while still maintaining access to the assets through the beneficiary spouse.
In other words, a SLAT lets you give assets away for estate planning purposes, but still retain a financial safety net within the marriage.
Why SLATs Are So Valuable Right Now
SLATs are gaining popularity for several key reasons, especially in today’s tax environment:
1. Take Advantage of the Current Estate Tax Exemption
The federal estate and gift tax exemption is at an all-time high — over $13 million per person in 2025 — but it’s scheduled to drop dramatically at the end of 2025 unless Congress takes action. While the gift tax exclusion is set to be raised and extended in the proposed “One, Big, Beautiful Bill” passed by the House Budget Committee, it has not passed the Senate and is still subject to change, including gift tax exclusion. By using a SLAT today, you can "lock in" this high exemption before it potentially gets cut in half.
2. Preserve Access to Assets
One of the biggest concerns people have with irrevocable trusts is losing access to their money. With a SLAT, the beneficiary spouse can receive distributions from the trust. That means the couple can still benefit from the assets, providing flexibility and peace of mind.
3. Protect Assets from Creditors and Lawsuits
Assets transferred into a SLAT are generally protected from creditors. If you’re a business owner, medical professional, or simply want to protect your family’s wealth from future legal risks, a SLAT can serve as an extra layer of asset protection.
4. Pass Wealth to Future Generations
SLATs can be designed to benefit not only your spouse but also your children and grandchildren. This allows for multigenerational wealth transfer, potentially saving your family millions in taxes over time.
5. Tailored to Your Goals
SLATs are highly customizable. You can choose the trustee, set distribution guidelines, and include specific instructions on how the assets should be managed and used — all while aligning with your broader estate planning goals.
Important Things to Know Before Setting Up a SLAT
While SLATs offer many advantages, they are complex tools and must be set up carefully. Here are a few important considerations:
- Irrevocable means permanent: Once you transfer assets to a SLAT, you can’t take them back. Make sure you’re comfortable parting with those assets.
- Access ends upon divorce or death: If the beneficiary spouse passes away or you get divorced, access to the trust ends. We often recommend life insurance or other planning strategies to offset this risk.
- Avoiding IRS scrutiny: If both spouses set up SLATs for each other, the trusts must be structured differently to avoid violating what’s known as the “reciprocal trust doctrine.” Working with an experienced estate planning team is essential.
Should You Consider a SLAT?
A Spousal Lifetime Access Trust can be a powerful part of your estate planning strategy — but it’s important to tailor it to your unique goals and family circumstances. If you're curious about how a SLAT could work for you, we invite you to schedule a complimentary consultation with our team. We'll walk you through the options, answer your questions, and help you build a plan that preserves your wealth and supports your future.
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