A spousal lifetime access trust (SLAT) sits at the intersection of tax efficiency, asset protection, and practical family liquidity. It’s an irrevocable trust one spouse creates for the benefit of the other, allowing the couple to move significant assets out of their taxable estates while still preserving a channel of indirect access to those assets during life.
A SLAT begins with one spouse—the grantor—transferring individually owned assets into an irrevocable trust. These transfers typically use the federal estate and gift tax exemption, which is $15 million in 2026 under current law.
The beneficiary spouse receives discretionary distributions of income or principal, and children or grandchildren are often named as remainder beneficiaries. Because the trust is irrevocable, the grantor cannot reclaim the assets, but the beneficiary spouse’s access provides indirect financial security for the couple.
Most SLATs are structured as grantor trusts for income tax purposes. The grantor pays the income tax on trust earnings, which effectively allows the trust to grow without erosion from taxes—an additional wealth‑transfer benefit.
Once assets are transferred, both the principal and all future appreciation are removed from the grantor’s taxable estate. This makes SLATs especially attractive in periods of high exemption amounts or anticipated legislative change.
Key Advantages
- Estate tax reduction: Assets and appreciation escape estate taxation in both spouses’ estates when structured properly.
- Indirect access to wealth: The beneficiary spouse’s distributions can support the household, giving the grantor comfort despite giving up ownership.
- Asset protection: Properly drafted SLATs shield assets from creditors of both spouses.
- Multi‑generational planning: SLATs often incorporate GST tax planning, enabling dynasty‑style wealth transfers.
- Probate avoidance: Remaining assets pass outside probate at the beneficiary spouse’s death.
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