The spousal lifetime access trust: A safety net in uncertain times

Description

Abstract: There’s a lot of uncertainty about the future of the federal estate tax regime — in particular the $5.12 million federal gift and estate tax exemption set to expire. A spousal lifetime access trust (SLAT) can provide a last-minute strategy to take advantage of the high exemption before it potentially is reduced. Regardless of the exemption’s fate, a SLAT can continue to be a valuable tool to help a spouse remove significant wealth from his or her estate while providing a safety net in the event financial circumstances change. This article explains how a SLAT works and points out important planning considerations. A sidebar warns not to run afoul of the reciprocal trust doctrine when a couple considers set up two SLATs.