Estate Tax Strategy for Couples

Spousal Lifetime Access Trust (SLAT)

Remove assets from your taxable estate while your spouse retains access to trust funds. The ideal strategy for married couples looking to lock in the current gift tax exemption before potential legislative reductions.

$13.61M
2024 Exemption Per Person
40%
Estate Tax Rate Avoided
72hr
Document Delivery
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Understanding the Basics

What Is a SLAT?

A Spousal Lifetime Access Trust (SLAT) is an irrevocable trust created by one spouse for the benefit of the other spouse and, typically, their descendants. The donor spouse transfers assets into the trust, removing them from their taxable estate. The beneficiary spouse can receive distributions from the trust, providing the couple with indirect access to the transferred assets.

SLATs have become especially popular because the current federal estate and gift tax exemption ($13.61 million per person in 2024) is scheduled to be cut roughly in half on January 1, 2026, reverting to approximately $7 million per person under the sunset of the Tax Cuts and Jobs Act. A SLAT allows married couples to use their full exemption now, before it decreases.

Both spouses can create SLATs for each other, potentially sheltering up to $27.22 million from estate taxes. However, the two trusts must be sufficiently different to avoid the IRS reciprocal trust doctrine, which could collapse both trusts if they are treated as mirror images of each other.

Is It Right for You?

Who Is a SLAT For?

Married Couples Near or Over the Exemption

If your combined estate approaches or exceeds $13.61 million, a SLAT allows one or both spouses to use their exemption now, removing assets from the taxable estate while maintaining family access.

Couples Concerned About Exemption Sunset

The 2017 Tax Cuts and Jobs Act doubled the estate tax exemption, but it sunsets after 2025. A SLAT locks in the higher exemption amount now, and the IRS has confirmed that gifts made before the sunset will not be clawed back.

Families Wanting Access to Gifted Assets

Unlike a standard irrevocable trust where you lose all access, a SLAT allows the beneficiary spouse to receive distributions for health, education, maintenance, and support, keeping the family financially comfortable.

What You Get

Key Features

Spousal Access

Your spouse can receive trust distributions for health, education, maintenance, and support, providing a financial safety net.

Estate Tax Elimination

Assets transferred to the SLAT are removed from your taxable estate, potentially saving 40% in federal estate taxes on every dollar above the exemption.

Exemption Lock-In

Use the current $13.61M exemption before the 2026 sunset. IRS regulations confirm gifts made before the reduction are grandfathered.

Creditor Protection

Assets in the SLAT are protected from the donor spouse's creditors, lawsuits, and divorce claims in subsequent marriages.

Dynasty Provisions

Structure the SLAT as a dynasty trust in qualifying states, extending protection across multiple generations beyond the original beneficiaries.

Reciprocal Trust Safeguards

Our attorneys structure dual SLATs with sufficient differences in terms, trustees, and provisions to withstand IRS reciprocal trust challenges.

The Process

How It Works

1

Estate Analysis

Our AI calculates your estate tax exposure and determines the optimal amount to transfer into one or two SLATs based on the current exemption.

2

Trust Drafting

We draft the SLAT with appropriate distribution standards, trustee selection, and reciprocal trust protections. Dual SLATs are differentiated to satisfy IRS requirements.

3

Funding & Gift Tax Filing

Assets are transferred and a gift tax return (Form 709) is filed to document the use of your exemption, locking in the current higher amount.

Time-Sensitive Opportunity

The Exemption Sunsets After 2025

The current $13.61M per person exemption drops to approximately $7M in 2026. Lock in the higher exemption now with a SLAT. Once the gift is made, it cannot be clawed back.

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No credit card required. 30-minute consultation. 100% confidential.

Common Questions

Frequently Asked Questions

This is the primary risk of a SLAT. If you divorce, the beneficiary spouse retains access to the trust, but the donor spouse loses indirect access. This is why SLATs are best suited for couples in stable marriages. Our attorneys can include provisions to address this risk, such as naming children as primary beneficiaries with the spouse as a secondary beneficiary.
Yes, both spouses can create SLATs for each other, potentially sheltering up to $27.22 million combined. However, the two trusts must be sufficiently different to avoid the reciprocal trust doctrine. DynastyOS ensures the trusts differ in trustee selection, distribution standards, beneficiary classes, or other material terms.
The IRS reciprocal trust doctrine states that if two trusts are substantially identical mirror images of each other, they may be "uncrossed" and treated as if each spouse created a trust for themselves, eliminating the estate tax benefits. Our attorneys structure dual SLATs with meaningful differences to prevent this outcome.
No. The IRS issued final regulations in November 2019 confirming that gifts made while the higher exemption is in effect will not be subject to a clawback if the exemption later decreases. This means a SLAT created now is protected even if the exemption drops in 2026.
The beneficiary spouse should generally not serve as sole trustee because their control over distributions could cause the trust to be included in their estate. A common approach is to use an independent trustee or a co-trustee arrangement. Our attorneys recommend the structure that provides the most access while maintaining tax benefits.

Lock In Your Exemption Before It Sunsets

A SLAT gives you the best of both worlds: estate tax reduction with continued family access. Start before the 2026 exemption reduction.

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