Spousal Lifetime Access Trusts (SLATs) in Utah: A Complete Guide

Introduction

If you’re married and looking for ways to reduce your taxable estate while still providing financial security for your spouse, a Spousal Lifetime Access Trust (SLAT) may be the right strategy.

SLATs are an increasingly popular estate planning tool for high-net-worth couples who want the best of both worlds: asset protection and tax savings without giving up all access to the wealth they’ve worked hard to build.

What Is a Spousal Lifetime Access Trust?

A Spousal Lifetime Access Trust (SLAT) is an irrevocable trust created by one spouse (the grantor) for the benefit of the other spouse (the beneficiary).

  • The grantor transfers assets (cash, investments, real estate, etc.) into the trust.

  • The beneficiary spouse can receive income and distributions from the trust during their lifetime.

  • After the beneficiary spouse passes away, the remaining assets typically pass to children or other beneficiaries.

This allows the grantor to move assets out of their taxable estate — reducing potential estate taxes — while ensuring their spouse can still access funds if needed.

Benefits of a SLAT

  • Estate Tax Reduction
    Assets placed in the SLAT are removed from the grantor’s estate, helping reduce estate taxes.

  • Asset Protection
    Assets in a SLAT are shielded from future creditors and lawsuits, adding a layer of protection for your family’s wealth.

  • Spousal Access
    Unlike many other irrevocable trusts, the beneficiary spouse can still access trust income or principal, providing flexibility and security.

  • Wealth Transfer
    After the spouse’s lifetime, remaining assets pass to children or other heirs, often with significant tax advantages.

How a SLAT Works: Step by Step

  1. Establish the Trust
    The grantor spouse sets up the SLAT, naming their spouse as the lifetime beneficiary and children (or other heirs) as remainder beneficiaries.

  2. Fund the Trust
    Assets are transferred into the SLAT. These may include real estate, securities, or business interests.

  3. Spousal Benefits
    The beneficiary spouse can receive distributions of income or principal during their lifetime, as needed.

  4. Legacy Transfer
    After the beneficiary spouse’s lifetime, the remaining trust assets pass to the next generation or other named beneficiaries.

Important Considerations

  • Irrevocable: Once created and funded, the SLAT cannot be undone.

  • Reciprocal Trust Doctrine: Both spouses cannot create nearly identical SLATs for each other, or the IRS may disregard them. Proper drafting is key.

  • Gift Tax Rules: Funding a SLAT counts as a taxable gift, but it can make use of the grantor’s lifetime gift and estate tax exemption.

  • Professional Guidance Needed: SLATs are complex and must be carefully drafted to meet IRS and Utah requirements.

Example Scenario

A Utah couple has a $5 million estate. The husband creates a SLAT and funds it with $2 million in investments.

  • The assets are removed from his taxable estate, reducing potential estate tax liability.

  • His wife (the beneficiary spouse) can receive distributions for living expenses if needed.

  • When she passes, the remainder goes to their children, free of additional estate tax.

Flat-Fee SLAT Planning at Cutler | Riley Law

We draft Spousal Lifetime Access Trusts for a flat fee of $4,000, which includes:

  • Custom trust design tailored to your family’s goals

  • Drafting and review of all trust documents

  • Coordination with your CPA or financial advisor

  • Integration with your overall estate plan

Why Choose Cutler | Riley Law?

  • Advanced Estate Planning Experience – We specialize in complex trusts like SLATs, CRTs, and asset protection strategies.

  • Transparent Pricing – Flat-fee services mean no billing surprises.

  • Trusted by Utah Families – With 600+ five-star reviews, we are one of Utah’s most trusted estate planning firms.

  • Clear, Practical Guidance – We explain sophisticated strategies in plain English so you can make informed decisions.

Next Steps

If you’re interested in reducing estate taxes while keeping access to your wealth, a Spousal Lifetime Access Trust could be the right fit.

Schedule your free consultation today to learn how a SLAT can benefit you and your family.