Many federal tax exemptions are scheduled to expire in 2026, and many experts believe that date could be accelerated when a new President is in office. As part of your estate planning, you will want to protect your loved ones by protecting your assets and minimizing high taxes on your estate. A trust is often used to protect your assets and avoid the cost and stress of probate, and minimize estate taxes. A Spousal Limited Access Trust (SLAT) is an irrevocable trust that a person, called the grantor, can set up to protect their spouse. SLATS are easy to set up and are very flexible, and are a type of gift trust that is often used to keep assets in the family.
There are many advantages to using a Spousal Limited Access Trust
• SLATs can be created to benefit children or grandchildren
• They can avoid income taxes and death taxes
• SLATs can provide an income stream
• They can protect family assets
• When the beneficiary spouse dies, the assets in the SLAT can provide for any descendants
• Your SLAT can own a family vacation home
• SLATs provide some creditor protections
NOTE: Because a SLAT is an irrevocable trust if the couple divorces the designated beneficiary spouse remains the beneficiary of the trust. In some situations, a trusts attorney may advise the grantor to protect their assets by not naming the spouse directly, but instead designation the beneficiary as the “legal spouse” at the time of the grantor’s death.
An experienced trusts and estate planning attorney can advise you on the benefits and disadvantages of a Spousal Limited Access Trust, and whether it is a good option for your situation.
If you have questions about Spousal Lifetime Access Trusts or any other estate planning topics, please contact us to schedule a free consultation. To learn how a trusts lawyer could help, call us for a consultation at 630-687-9100.
We provide legal services in Cook, DuPage, Kane, Lake, and Will counties.