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What is a SLAT Trust & Do You Need One?

What is a SLAT Trust? Do you need one? What are the benefits… and why does everything associated with trusts seem so confusing?

First things first. A SLAT Trust is the acronym for a popular type of trust. It stands for: Spousal Lifetime Access Trust. It’s a form of an irrevocable trust that gives trustees the powers to authorize distributions to one spouse, should the need arise, allowing them to tap into the funds of the trust.

These types of trusts can also be accessed by other immediate family members, such as a child or a grandchild. They take advantage of known tax shields such as the lifetime gift tax and generation-skipping tax exemptions, which protect the assets as well as help shield them from creditors, too.

One of the main benefits of a SLAT is that once a spouse has been named, the grantor of the trust can still access its assets. These types of trusts can be setup to make scheduled distributions, too, for things like educational costs, health, spousal support and others. What’s more, this type of SLAT trust can also be designed to give the beneficiary access as needed.

Types of SLAT Trusts

There are two different types of these SLAT trusts you want to be aware of as part of your estate planing checklist. One is called the completed gift SLAT and the other is called the incomplete gift SLAT.

  • Completed Gift SLAT: As you might have guessed, a completed gift SLAT gives you more wiggle room and lets the estate distribute assets at will to the spouse or family member. When properly designed, the trust’s assets enjoy unique protection from creditors and even a divorcee, not to mention the fact that it’s also immune to (most) estate taxes as well.
  • Incomplete Gift SLATL: The incomplete gift SLAT is the most popular type of SLAT being used because it not only protects the trust from creditors but also because it can transfer the assets to benefit of the spouse or other family members. In the case of litigation or creditors, the assets of this trust are protected.

There are numerous way to go about procuring the right SLAT strategy for your Atlanta estate planning needs. Our law firm has vast experience helping our clients safeguard their assets while setting them up with right strategy that protects their interests now and well into the future. Give us a call to discuss how we can help you with all your estate planning needs today.

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