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Leverage Estate Tax Exemptions with a Spousal Lifetime Access Trust (SLAT)

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If you are married and thinking about gifting assets to your loved ones yet have concerns about losing access or placing someone other than your spouse in control, one solution might be a Spousal Lifetime Access Trust (SLAT).

How a SLAT Works

A SLAT is a trust established by one spouse (grantor) to benefit the other, as well as any other family members such as children or grandchildren. The SLAT transfers assets from your estate to your spouse as a gift, which uses your estate/gift tax exemption. With proper SLAT planning your spouse can be both the trustee and the primary beneficiary.  This means your spouse can maintain control and have access to assets protected in the trust. 

Benefits

  • Beneficiaries can receive distributions prior to the grantor passing away
  • Allows protection from estate taxes, mental disability, creditors, divorces, etc. 
  • Utilization of the generation-skipping transfer taxation (“GST”) exemption – avoiding transfer taxes over multiple generations
  • Additional advantages when leveraged with proper life insurance planning

Why Now?

Last year’s Tax Cuts and Jobs Act doubled the amount you can transfer (from $5.6 million to $11.4 million) out of your federal taxable estate. This amount is set to expire at the end of 2025, so now is an ideal time to review your estate planning options. With proper planning, you can also create a SLAT for your spouse and your spouse can create a SLAT for you. This means your exemption amount could total up to $22.8 million! 

For more information regarding the many benefits of SLAT planning, please call Kelleher & Buckley, LLC at (847) 382-9130 or contact us through our website.  

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