Spousal Lifetime Access Trusts (SLATs) are a popular estate-planning tool for married couples who own a business. SLATs are irrevocable trusts that allow for the transfer of assets from one spouse to another during the course of their marriage. In addition, these trusts can provide certain benefits such as asset protection and tax savings. Let’s take a look at what you need to know about SLATs.
What is a SLAT?
A SLAT is an irrevocable trust that allows one spouse to transfer assets to the other without incurring gift taxes. This trust also gives the grantor (the person transferring the asset) access to those assets in case of emergency, while still providing some asset protection benefits. The grantor’s beneficiary (the person receiving the asset) will have full control over the trust and can use it however they see fit, including making investments or leveraging it for tax savings purposes.
By utilizing a SLAT, married couples can transfer assets between each other without worrying about incurring any taxes or losing control over their assets. Furthermore, if either spouse passes away, the remaining spouse will still have access to their shared assets through this trust.
Benefits of a SLAT
There are numerous benefits associated with setting up a SLAT for your estate planning needs:
- Asset Protection – A SLAT provides protection against potential creditors or lawsuits in order to help ensure that your hard-earned wealth remains safe and secure.
- Tax Savings – By transferring assets into a trust, you may be able to reduce your taxable income by taking advantage of deductions available through trusts like healthcare costs or charitable donations. Additionally, there are no capital gains taxes incurred when transferring assets into this type of trust since it is irrevocable.
- Flexibility – A SLAT allows you to customize how you want your assets distributed upon death so that your wishes are carried out according to your desires rather than what state law dictates. This flexibility makes it an attractive option for those who prefer more control over their estate planning situation.
Conclusion:
Spousal Lifetime Access Trusts offer many advantages for married couples who own a business and want to ensure their shared wealth is protected and properly distributed according to their wishes upon death or incapacity. By utilizing this unique estate planning tool, not only will you save on taxes but also enjoy greater peace of mind knowing that your hard-earned money is safeguarded from potential creditors or lawsuits while still providing access in case of emergency situations. With all these advantages combined, it’s easy to see why more people are turning towards this powerful option when creating their estate plans today!
