Investigating the Spousal Lifetime Access Trust

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SLAT (Spousal Lifetime Access Trust) represents an irrevocable trust, benefiting the deceased-donor’s spouse and children. By transferring assets to a SLAT, a donor can minimize their exposure to estate taxes at death, making use of the deceased-spouse’s gift tax exemption.

This kind of trust provides the living spouse with access to donor’s income and property. The difference between the SLAT and Bypass Trust lies in the laws governing these trusts and their respective trust agreements. In the case of Bypass Trust, one of the spouses must be deceased in order for the living spouse to get access to the trust. Although, the SLAT offers accessibility for the surviving-spouse to the donor’s assets through the gift tax exemption.

The SLAT increased in 2012 and allowed donors to transfer up to 5 million dollars enjoying an advantage of gift tax exemption. Today on a federal level, the gift-tax exemption has increased to over $11 million dollars per person.

Of course, the SLAT has its drawbacks. If the spouses get divorced, one of them (beneficiary) loses access to the trust’s assets. If the donor dies, the surviving-spouse can also forfeit their right to the deceased-spouse’s property.

The SLAT when drafted by knowledgeable and experienced legal professionals is a hassle-free essential part of all applicable estate plans factoring in the following considerations:

1) Investigate Reciprocal Trust Doctrine, which was developed in response of tax-avoidance.
2) Consult with your licensed tax-professional in order to best utilize the gift-tax exemption limit before moving your assets.
3) Remember that trusts have their individual similarities and differences.
4) Try to cover all emergency cases like death, divorce and/or children.

Of course, it is quite a cumbersome task to consider all of the aspects of a reliable trust for a non-professional. That is why our clients feel at ease leaving Morgan Legal Group, P.C. with their estate planning needs. Our team of experienced legal professionals is always prepared to help in the sphere of asset protection, trust & estate planning, business continuation, wealth preservation, immigration, as well as real estate transactions. More information about SLAT is available on http://morganlegalny.com/.