December 23, 2020

Trusts are a popular estate planning strategy because they accomplish multiple goals at once, including privacy, greater layers of control and allowing for support to the beneficiaries that you choose. When it comes to thinking about your taxable estate, you may be able to move some assets inside a trust for proper management, thus giving up control.

Creating an irrevocable trust now could help you to take advantage of today’s high exemption levels. Staying under the exemption amount means that you get money out of an estate now without any gift tax consequences and you can still enable access to the funds through a spouse with the remainder of the funds going to other heirs. These are called spousal lifetime access trusts or SLATs.

These are irrevocable trusts that have a spouse as a beneficiary and even grandchildren or children as remainder beneficiaries. Your spouse is eligible to tap into the assets inside the trust for education, health or general living expenses which can also benefit you indirectly. While you can use a separate SLAT created by your spouse naming you as the beneficiary, be careful about this being identical as this will raise questions with the IRS. For more information about this process, schedule a consultation with a lawyer.

Our estate planning law office can help you decide what kinds of strategies are most appropriate for your needs.