SPOUSAL LIFETIME ACCESS TRUST
What is a Spousal Lifetime Access Trust?
A Spousal Lifetime Access Trust (SLAT) is a specially designed irrevocable trust for married
clients. When properly structured, the trust keeps assets including life insurance proceeds outside
of both spouses’ estate, while allowing the trustee to access the trust’s assets and policy’s cash
value for the benefit of the non-grantor spouse. After the non-grantor spouse’s death, the trust
property can then be distributed to other beneficiaries such as children or grandchildren.
What are the Possible Advantages of a SLAT?
Having Your Cake & Eating it Too—This type of trust has become popular in large part
because it allows a client to do key planning, while still providing flexibility and access to
the assets in the trust. Yet, the trust partitions the assets out of the estate for estate tax purposes.
Donor Peace of Mind—Knowing that gifts to the trust could possibly be recovered if
circumstances change can increase client comfort level with the gift.
Increased Financial Security for Non-Grantor Spouse—The fact that the spouse’s
distribution rights last for life means potential access to trust’s assets continues,
even if the donor dies.
Possible Tax Advantages—Properly drafted and properly implemented by an attorney, a
SLAT can provide a family with federal income tax and federal estate tax advantages.
A SLAT is Ideal for Married Couples who:
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•
•
•
•
Are typically age 40 and older
Have assets for retirement, but possibly desire more
Have strong relationships and no chance of divorce
Have an insurable grantor
Share wealth transfer goals between spouses
Possible Disadvantages of a SLAT:
• The non-grantor spouse could die first
• The couple could divorce and upset the workings of the SLAT
877.842.1212 | emercury.com
Mercury Financial Group does not give tax or legal advice and encourages clients to seek tax and legal counsel on such matters. FOR BROKER DEALER USE ONLY
SPOUSAL LIFETIME ACCESS TRUST
Non-Grantor
Spouse
Grantor
Spouse
This could be directed
to make distributions to
a non-grantor spouse.
Potential
tax-free
income during
spouse’s
lifetime
Fund the SLAT with
gift of separate
property
Life Insurance
Contract on
grantor/insured
Trustee
purchases life
insurance
contract
owned by
SLAT
Beneficiaries
SLAT
At death of
grantor and
non-grantor
spouse
Death benefit from life
insurance contract is paid to
the trust for the benefit of
beneficiaries, free of federal taxes.
877.842.1212 | emercury.com
Mercury Financial Group does not give tax or legal advice and encourages clients to seek tax and legal counsel on such matters. FOR BROKER DEALER USE ONLY