Spousal Lifetime Access Trust (SLAT)
An irrevocable trust one spouse creates for the benefit of the other (and descendants), using up the grantor-spouse's lifetime exemption while keeping indirect access to the assets through the beneficiary-spouse. The most popular HNW exemption-use technique of the current era.
A Spousal Lifetime Access Trust () is an irrevocable trust created by one spouse (the grantor) for the primary benefit of the other spouse (the beneficiary-spouse) and, typically, their descendants. The grantor uses a large chunk of their federal lifetime gift and estate-tax exemption to fund the trust now; the beneficiary-spouse can request distributions, giving the family indirect access to the transferred wealth.
The timing case: the federal exemption is at a historically high level (roughly $14M per person for 2026, indexed for inflation under current law). Congress has adjusted the exemption repeatedly over the past three decades, and if a future reduction occurs, any exemption above the reduced amount that has not already been used is generally considered gone. "Use it or lose it" is the planning frame — SLATs let a couple lock in today's exemption without fully severing themselves from the assets. This does not mean a reduction is imminent; it means families who want to hedge against the possibility tend to do so in advance rather than after a bill passes.
Key trade-offs and traps: (1) reciprocal-trust doctrine — if spouses create SLATs for each other with substantially similar terms, the IRS will "uncross" them and pull both back into their respective estates. Avoid by making the two trusts materially different (different trustees, different distribution standards, different timing, etc.). (2) Divorce risk — the beneficiary-spouse's access ends at divorce. (3) Death of beneficiary-spouse ends the indirect access; plan for that contingency. (4) Grantor-trust status is typical, so the grantor pays the income tax on SLAT earnings (functionally an additional tax-free gift).
Most SLATs are structured as grantor trusts for income-tax purposes (intentional "defects" per IRC § 675 or § 677), giving the SLAT intentionally-defective-grantor-trust () benefits alongside the spousal-access feature. See the IDGT option for the shared mechanics.
Tagged 🔴 — SLATs are among the most heavily litigated estate-tax structures; drafting mistakes are expensive and often unfixable.
State-specific notes
Federal gift and estate-tax exemption is unified at the individual level; SLATs use the grantor's exemption. The spousal-access feature does not trigger inclusion under IRC § 2036 as long as the grantor is not a beneficiary and retains no prohibited powers.
Virginia has no separate state estate tax, so SLAT planning is driven purely by federal exemption use. Virginia trust law (Title 64.2) applies to trust administration if situs is Virginia.
West Virginia has no separate state estate tax either. SLAT situs in West Virginia follows the Uniform Trust Code at Chapter 44D.
SLATs are administered under the Alabama Uniform Trust Code (Ala. Code § 19-3B-101 et seq.) and driven by federal gift and estate tax rules, since Alabama has no state estate tax. Alabama is a common-law (separate-property) state, so asset-tracing for the reciprocal-trust doctrine follows separate-property principles. Alabama's elective share (Ala. Code § 43-8-70) can complicate SLAT drafting if the marriage dissolves.
References
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