How do you protect your wealth, provide for your spouse, and still leave a meaningful legacy? For many high-net-worth and ultra-high-net-worth families, the answer lies in strategies that surpass the classic, cut-and-dry approach to trust and estate planning. One option, known as a Spousal Lifetime Access Trust (SLAT), can offer families flexibility, asset protection, and tax efficiency.

What Is a SLAT?

A Spousal Lifetime Access Trust is an irrevocable trust funded by one spouse, the donor, for the benefit of the other spouse, the beneficiary. What makes SLATs distinctive is access, meaning that the beneficiary spouse can receive distributions of income or principal if needed, while the assets are removed from the donor spouse’s taxable estate. This structure can provide families with the confidence that assets are preserved for the next generation and that a widowed spouse has the resources he or she needs. Other benefits of SLATs include:

• Asset Protection: Placing assets in a SLAT can help shield them from creditors, lawsuits, or other claimants, a consideration for families wanting to protect their security and assets.
• Tax Efficiency: By moving assets, and their future growth, outside of the taxable estate, SLATs can reduce or even eliminate estate taxes, helping maximize the wealth ultimately passed to children, grandchildren, and/or charitable causes.
• Irrevocability: Though irrevocable, SLATs allow for certain safeguards. For example, the donor spouse can retain the right to replace an independent trustee, ensuring that family intentions are carried out over time.

Additional Considerations

While SLATs offer valuable advantages, they also come with important caveats:

• Marriage Dependency: The indirect benefit to the donor spouse disappears if there is a divorce or upon the beneficiary spouse’s death.
• Tax Responsibility: SLATs are typically “grantor trusts,” meaning the donor spouse pays the annual income tax on trust earnings despite being neither a beneficiary or trustee. Paying trust taxes is not considered a gift to the SLAT, meaning that the trust assets can grow within no income tax liability and there is more long-term liquidity.
• Asset Selection: Assets placed in a SLAT retain the original tax basis of the spouse.
  Using a swap power can allow the donor spouse to exchange low-basis assets for
  higher-basis ones, minimizing potential capital gains taxes for heirs.
• Distributions: To maximize growth, distributions should generally be avoided unless
  necessary.

2025 Tax Law Changes

SLATs became especially popular ahead of the scheduled sunset of high federal estate
tax exemptions. However, the One Big Beautiful Bill (OBBBA), signed into law in July
2025, extended and strengthened a few provisions:

• Higher Exemptions: The federal gift and estate tax exemption was permanently increased to $15 million per person ($30 million for couples) beginning in 2026, indexed for inflation.
• SALT Deduction Cap: The state and local tax (SALT) deduction cap was raised to $40,000 starting in 2025, with some phaseouts for high earners. While these changes make SLATs less urgent for some families, they remain a powerful planning tool, especially for asset protection, tax efficiency, and long-term wealth transfer.

Why SLATs Still Matter

Even with elevated exemption amounts, SLATs provide benefits that extend well
beyond tax savings:

• Ensuring your spouse’s financial security while preserving family wealth.
• Protecting assets across generations from creditors or estate erosion.
• Supporting a clear, strategic plan that aligns with your vision for your family’s legacy.

For ultra-high-net-worth families, SLATs represent one of the most effective ways to
balance near-term flexibility with long-term wealth preservation. While they are not for
everyone, they can be a valuable addition to a sophisticated estate plan.

At VestGen, we help families explore advanced estate planning strategies like SLATs to
ensure their wealth supports both today’s lifestyle and tomorrow’s legacy. If you’re
considering whether a SLAT might fit into your plan, connect with a VestGen advisor for
a customized financial plan.