Glossary term
Spousal Lifetime Access Trust (SLAT)
A SLAT is an irrevocable trust created by one spouse for the other spouse’s benefit while aiming to remove assets from the grantor’s taxable estate.
Updated
Read time
What Is a Spousal Lifetime Access Trust?
A spousal lifetime access trust, or SLAT, is an irrevocable trust created by one spouse for the benefit of the other spouse and often other family members. The grantor spouse gives assets to the trust, and the beneficiary spouse may receive distributions under the trust terms.
The attraction is that the family may retain indirect access through the beneficiary spouse while the gifted assets, and potential future appreciation, may be kept out of the grantor spouse's taxable estate if the trust is structured properly.
Key Takeaways
- A SLAT is created by one spouse for the benefit of the other spouse.
- Funding a SLAT is generally an irrevocable gift.
- The trust can support estate tax planning while preserving limited family access.
- Divorce, death of the beneficiary spouse, reciprocal trust issues, and tax rules can create major risks.
How the Structure Works
One spouse transfers assets to an irrevocable trust. The other spouse is named as a beneficiary, usually along with children or descendants. A trustee manages the trust and makes distributions according to the document.
SLAT Element | Planning Role |
|---|---|
Grantor spouse | Creates and funds the trust. |
Beneficiary spouse | May receive distributions under trust terms. |
Trustee | Controls administration and distributions. |
Remainder beneficiaries | Often receive assets after the beneficiary spouse's interest ends. |
Access and Loss of Control
A SLAT is not the same as keeping the assets personally. Once funded, the grantor spouse generally gives up direct ownership and should not treat the trust as a personal account. Access is indirect and depends on the beneficiary spouse, trustee powers, trust terms, and family circumstances.
That distinction matters if the spouses divorce, the beneficiary spouse dies first, or the trustee refuses a distribution. The trust may still work for estate tax purposes, but the family's practical access can change sharply.
Risks to Plan Around
Couples sometimes consider creating SLATs for each other. If the trusts are too similar, the reciprocal trust doctrine can become a concern. Funding choices also matter because using jointly owned property or community property without careful planning can weaken the intended result.
SLATs are most useful when the family can afford to give up direct control. They are not a simple way to keep assets available while pretending they are gone for tax purposes.
The Bottom Line
A SLAT can combine estate tax planning with limited spousal access, but it is a sophisticated irrevocable trust. The value depends on thoughtful drafting, funding, trustee selection, and a clear understanding of what access may be lost.