Spousal Lifetime Access Trust (SLAT) Case Study

Meet Jack and Diane

  • Jack and Diane are a happily married couple.
  • Jack and Diane have three children. They have a combined net worth of $30M consisting of $25M in Diane’s business and $5M in Jacks.
  • Jack and Diane realize they have an estate tax problem and would prefer not to pay estate taxes.
  • Jack and Diane are young enough to be concerned about giving away large amounts of assets to their children and descendants.

How can Jack and Diane reduce their potential estate tax liability while still having the ability to benefit from the assets?
  • Jack and Diane’s attorney drafts two non-reciprocal SLATs.
  • In the first trust, Jack is the grantor, and the beneficiary is Diane.
  • In the second trust, Diane is the grantor, and the beneficiaries are Jack and their descendants.
  • The trust should be drafted with enough differences so that they are not reciprocal.
  • Jack gifts $5M to the trust he established. Diane gifts $11.7M to the trust she established.


Players in the SLAT strategy:
  • Jack and Diane are grantors of their respective trusts.
  • Jack and Diane are beneficiaries of each other’s trusts. The beneficiary spouse typically retains investment discretion and determines the investments inside the trust.
  • IconTrust is typically the administrative and distribution trustee to handle the books and records and distributions from the trust.


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