Spousal Lifetime Access Trust (SLAT) Attorney San Antonio TX
Spousal Lifetime Access Trust (SLAT) is an irrevocable spendthrift trust—often a completed gift trust—that a settlor creates for the benefit of their spouse, with the remainder after the spouse’s death typically held for the settlor’s children and other descendants. Because SLATs are not self-settled, it is not necessary to form them in specific jurisdictions, which provides the settlor with additional flexibility when determining whom to name as the trustee. A SLAT should not direct any mandatory distributions to any beneficiary; rather, a SLAT should provide the trustee with broad discretionary distribution powers to maximize the asset protection it offers. When these trusts are structured properly, the assets held in the trust are protected from the creditors of the settlor and the settlor’s spouse, but the spouse can still receive distributions or benefit from trust assets if necessary.
SLATs are popular when creating a third-party for asset protection purposes, but most types of third-party trusts, if structured properly, offer significant asset protection. Thus, trusts created by a settlor for their children can provide asset protection benefits for both the settlor and their children, regardless of whether the trust is formed for that purpose.
The transfer to the trust is intentionally designed not to qualify for the unlimited marital deduction so that the donor spouse’s estate tax exemption can be utilized to the fullest possible extent, and the appreciation on the assets transferred to the SLAT will not be subject to future gift and estate tax.
Working with an Experienced Estate Planning Attorney
A Spousal Lifetime Access Trust is a powerful tool in estate planning, offering both asset protection and tax advantages. It allows individuals to provide for their spouse during their lifetime while ensuring that wealth is preserved for future generations. By transferring assets into a SLAT, the donor spouse can reduce their taxable estate, benefit from creditor protection, and minimize estate taxes. For individuals in Texas seeking to protect their wealth and create a comprehensive estate plan, working with an experienced attorney is crucial to ensure the proper structure and execution of a SLAT. Contact Carroll Law Group today for a free consultation.